Exclusive: Three Unpublicized CFTC Polymarket Trading Investigations Uncovered Via FOIA Records

Newly released government documents obtained by WIRED through a Freedom of Information Act request reveal that U.S. federal regulators have opened no fewer than three previously undisclosed probes targeting trading activity on the popular prediction market platform Polymarket. Voting records published by the Commodity Futures Trading Commission — the federal body tasked with overseeing prediction market operations — offer unprecedented transparency into how regulators are approaching these low-profile enforcement actions.

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First Probe: Biden-Era Pardon Related Insider Trading

In early May, CFTC Chair Michael Selig signed off on a formal order authorizing the agency’s Enforcement Division to open a non-public investigation into suspected insider trading tied to Polymarket event contracts covering last-minute pardons issued by former President Joe Biden. The order granted full investigatory powers to the team, including the ability to compel witness testimony, issue subpoenas, administer oaths, and demand that relevant parties turn over all related documentation.

The redacted FOIA materials WIRED received do not name the specific suspicious trades under review, but the order was issued just weeks after an NPR exposé flagged an anomalous Polymarket user who walked away with more than $300,000 profit from pardon-linked wagers placed in the final days of the Biden administration. The trader had correctly bet that Biden would issue preemptive pardons to a slate of high-profile MAGA movement critics, including former U.S. Representatives Liz Cheney and Adam Kinzinger, and sitting U.S. Senator Adam Schiff.

Second Probe: Iran-Tied Event Contracts

At the end of the same month, Selig approved a second sealed investigation order, this one focused on Polymarket’s “Iran event contracts.” As with the pardon probe paperwork, the order did not include granular case details, but it was filed two weeks after a 60 Minutes segment uncovered a network of coordinated suspicious Polymarket accounts that generated a combined $2.4 million in profit from Iran-related trades, boasting a near-unheard-of 98% win rate.

Joseph Konizeski, a former lead chief trial attorney in the CFTC’s Enforcement Division, notes that the timing of both probes immediately following major news reports raises red flags. “If these investigations are being launched entirely in response to press accounts of potential Commodities Exchange Act violations, that’s a very clear, significant sign of structural weakness in this entire regulatory framework for prediction markets,” he told WIRED.

The CFTC has faced widespread criticism through the early months of the second Trump administration, as industry observers argue the agency has taken an unusually permissive, pro-industry stance toward the prediction market sector.

Third Probe: Google Themed Event Contract Trading

Selig greenlit a third unreported investigation in July, this one zeroing in on alleged insider trading connected to Polymarket event contracts tied to Google products. Emails included in the FOIA document dump from Paul Hayeck, Acting Director of the CFTC’s Enforcement Department, clarify that the probe targets “additional individuals who may have taken part in insider trading linked to Google’s 2025 Year in Search Ranking.”

Hayeck explicitly noted that the U.S. Attorney’s Office for the Southern District of New York (SDNY) is running a parallel, separate investigation, and that the CFTC’s work here would not overlap with the already public active enforcement case against Michele Spagnuolo, the Google engineer accused of running a separate insider trading scheme on the platform.

Requests for comment from SDNY were declined, while Google directed WIRED to a prior June public statement confirming that Spagnuolo is no longer employed by the company. The CFTC itself did not respond to multiple requests for comment on the status of the three newly uncovered probes.

“While we do not comment on ongoing individual investigations, we regularly escalate relevant matters to law enforcement and provide full support to active official investigations as part of our core commitment to upholding the integrity of our markets,” Olivia Chalos, Deputy Chief Legal Officer at Polymarket, told WIRED in a written statement.

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Broader Regulatory Context for Prediction Markets

The three newly revealed probes run parallel to separate widely reported scrutiny of Polymarket as a corporate entity: the platform’s original flagship iteration was banned from operating in the U.S. in 2022, but it secured approval to launch a U.S.-regulated version with a restricted, curated set of trading markets in late 2025. The firm recently closed a high-profile fundraising round led by Donald Trump Jr.’s venture capital firm 1789 Capital, which valued the company at $21 billion.

The CFTC also has a track record of opening insider trading probes targeting Polymarket’s top industry rival Kalshi in prior years. Per The New York Times, Kalshi itself has voluntarily referred no fewer than 32 separate potential violation cases to the CFTC for review. Regulators hit former U.S. Representative George Santos with a $35,000 fine earlier this year for market manipulation tied to a Kalshi event contract centered on whether he would attend Trump’s 2026 State of the Union address. Kalshi followed up by issuing Santos the platform’s first ever lifetime ban for violating anti-manipulation rules, alongside an additional $71,000+ fine for the same incident. No criminal charges have been filed against Santos over the behavior.

To date, two public arrests have been made as a result of prior public Polymarket insider trading investigations. Back in April, federal authorities arrested a U.S. Special Forces officer, who prosecutors allege used classified national security information to generate more than $400,000 in profit on event contracts betting on the capture of former Venezuelan leader Nicolás Maduro. The second arrest came in May, when Spagnuolo — who is accused of netting over $1.2 million via his insider trading activity — was taken into custody while traveling to New York. In both cases, the CFTC filed corresponding civil enforcement charges, while the U.S. Department of Justice brought separate criminal fraud charges. Both defendants are fighting the cases, arguing that trades placed on Polymarket qualify as unregulated gambling activity, and do not fall under the purview of federal commodities law.

It remains unconfirmed whether the DOJ has opened parallel criminal investigations into the Polymarket Iran event contract and Biden pardon trading cases. The agency did not immediately respond to WIRED’s requests for comment on the matter, though a former senior CFTC staffer told WIRED that parallel criminal probes are highly likely, “given the high stakes and significance of these matters.”

Additional reporting by Maddy Varner

Update, September 11, 2026, 4:15 PM ET: This article has been revised to include the official response from the Southern District of New York.