A recent investigation by The New York Times reveals that several career officials at the U.S. Commodity Futures Trading Commission (CFTC) who raised compliance concerns about prediction market platforms were subsequently suspended, investigated, or forced to leave their positions. This has once again drawn attention to the agency’s approach to cryptocurrency regulation in recent years.
Several officials were suspended after raising questions.
The report noted that relevant officials previously raised questions about the operations of Polymarket, Crypto.com, and associated entities, focusing on consumer protection, anti-fraud controls, and whether certain associated entities had completed necessary regulatory reviews. Subsequently, then-acting chair Caroline Pham and senior legal counsel Brigitte Weyls were accused of assisting these companies in continuing their operations.
The New York Times reported that by the end of 2025, at least two officials who raised questions had been placed on administrative leave, and three other staff members involved in crypto enforcement faced similar treatment. The report cited internal sources saying the message within the CFTC was “don’t cause trouble.”
Crypto enforcement efforts are said to be scaling back
The report also states that during the current administration, the CFTC has significantly scaled back its enforcement actions against the crypto industry. It mentions that the agency has at least withdrawn five crypto investigations and has only initiated two crypto enforcement cases, both targeting individual operators rather than large platforms or companies.
The White House denied any conflict of interest. White House spokesperson Davis Ingle told The New York Times that there are no issues regarding conflicts of interest. Meanwhile, in March, the CFTC launched a broader rulemaking process seeking public input on event contracts, covering public interest restrictions, cost-benefit analyses, and future regulatory direction.
New York State lawsuit proceeds alongside congressional pressure
While seeking to expand its authority at the federal level, the prediction market platform continues to face legal challenges at the state level. Reuters previously reported that on April 24, the CFTC sued the state of New York, alleging that the state overstepped its authority by interfering with federal regulatory jurisdiction. Previously, New York had sued Coinbase Financial Markets and Gemini Titan over prediction market products.
The U.S. Congress has also expressed concern over the CFTC’s current staffing shortages and leadership vacancies. Last week, the House Agriculture Committee urged President Trump to fill the agency’s four vacant commissioner seats as soon as possible, stating that a committee with only one remaining commissioner is ill-equipped to handle its expanding responsibilities in regulating cryptocurrency and prediction markets.
Polymarket continues to advance its compliance path.
Amid ongoing regulatory disputes, Polymarket continues to engage with the CFTC in an effort to lift a four-year U.S. ban related to a 2022 enforcement action. The company previously paid a $1.4 million settlement in connection with the case, and current discussions are reportedly focused on contract design, KYC, and reporting requirements.
According to previous reports, Polymarket acquired QCX LLC, a CFTC-registered exchange, for approximately $112 million in 2025, a move seen as a significant step toward re-entering the U.S. compliant market. Meanwhile, the Senate Banking Committee has advanced the CLARITY Act by a vote of 15 to 9, which aims to reallocate regulatory authority over digital assets between the SEC and the CFTC.