The US Commodity Futures Trading Commission has launched an extensive investigation into prediction market platform Polymarket, according to a person familiar with the matter who requested anonymity. The probe represents another regulatory challenge for the company, which has faced operational difficulties and legal scrutiny in recent months.

Regulators are examining social media activity connected to Polymarket, including reports that the company hired dozens of college-aged creators to film fake trades and fabricated wins. The Wall Street Journal reported these marketing tactics were designed to attract users to the platform, raising questions about transparency in digital asset promotion.

This investigation comes as prediction markets face increased regulatory attention amid broader oversight of cryptocurrency and digital asset platforms. The CFTC's involvement signals potential enforcement action that could impact how these markets operate and market to customers.

The probe threatens Polymarket's reputation and could result in significant penalties if regulators determine the company violated disclosure rules. For the prediction market industry, this represents a test case for how traditional financial regulators view decentralized trading platforms.