CFTC, US soldier accused of illegal Polymarket bet spar over interpretation of prediction markets
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The CFTC has launched a full investigation into Polymarket, including allegations of wash trading that have impacted the Robinhood event contract ecosystem; Nasdaq has for the first time distributed TotalView market data on-chain via Pyth Network.
According to Mars Finance and BBX data, the prediction market faced a double whammy yesterday, with traditional exchange infrastructure accelerating its on-chain transformation. Key developments include: Robinhood Markets, Inc. (NASDAQ: $HOOD)'s prediction market/event contract ecosystem suffered a double regulatory blow yesterday: First, the U.S. Commodity Futures Trading Commission (CFTC) launched a full investigation into Polymarket (privately held), covering its social media activities and suspected manipulation; second, a Michigan court ruled to prohibit Kalshi (privately held) from offering sports betting services to Michigan residents. While these two events directly target Polymarket and Kalshi, their strategic importance to Robinhood cannot be ignored—Robinhood, through its subsidiary Robinhood Derivatives LLC, offers event contract products linked to KalshiEx LLC or ForecastEx LLC, making it the largest prediction market distribution channel among regulated brokers in the U.S. The CFTC's escalating investigations and enforcement actions against similar platforms will directly impact Robinhood's compliance architecture and product expansion speed; the sector's average daily trading volume in June reached a record high. Nasdaq, Inc. (NASDAQ: $NDAQ) announced yesterday that it has selected Pyth Network (an on-chain price oracle protocol) as its on-chain distribution partner for TotalView (Nasdaq's full market depth data product). This marks the first time Nasdaq has integrated its core institutional-grade market data onto a blockchain network—TotalView provides full-level buy and sell quotes and transaction data for the entire US stock market, historically only available to traditional financial institutions (paid subscriptions). On-chain distribution means that DeFi protocols, decentralized exchanges, and smart contracts can, for the first time, access Nasdaq-level real-time equity market data as an on-chain pricing basis. The Pyth Network token (PYTH) subsequently rose by over 6%, which the market interpreted as a historic convergence of traditional securities market infrastructure and decentralized finance.
Polymarket launches Bitcoin Lightning Network instant deposits and integrates the Spark protocol.
BlockBeats reported on July 8th that prediction market platform Polymarket announced support for instant, self-custodied deposits via the Bitcoin Lightning Network, powered by the Spark protocol. Compared to the previous on-chain deposit method, which required 3 to 6 block confirmations and took approximately 10 to 60 minutes, the new solution achieves near-instantaneous deposits, lowering the deposit threshold and transaction costs. According to reports, Spark performs checks for double-spending risk, fees, and Replace-by-Fee (RBF) during transaction broadcasting, achieving "zero-confirmation" deposits. It also supports on-chain, Lightning Network, and stablecoin payment channels, eliminating the need for the platform to operate its own Lightning Network nodes. Polymarket stated that this move will further improve the efficiency of Bitcoin users' fund utilization and enhance its competitiveness against rival Kalshi.
South Korean regulators are reviewing whether Polymarket constitutes illegal gambling, giving it an opportunity to respond before making a decision.
PANews reported on July 6 that, according to The Block, South Korea's media regulator will give Polymarket an opportunity to respond before deciding whether to take corrective action against its prediction market platform. The regulator is reviewing whether Polymarket's services constitute illegal gambling activities prohibited by South Korean law.
The US CFTC has launched a broad investigation into Polymarket, covering social media activity and fraudulent transactions.
PANews reported on June 30th that, according to Bloomberg, the U.S. Commodity Futures Trading Commission (CFTC) is conducting a broad investigation into prediction market platform Polymarket, covering aspects of its business, including its social media activities. This comes after the Wall Street Journal reported that Polymarket employed dozens of social media creators, primarily college-aged, to produce fake trading videos to attract users. The investigation now covers other aspects of the company's business. The CFTC and the Department of Justice concluded their investigation last year into whether Polymarket violated a ban on U.S. users, but some U.S. users still bypassed the ban by using VPNs and other methods to access its main platform. Since reaching a settlement with the CFTC in 2022, Polymarket has technically banned U.S. users from using its main platform, but the company is taking steps to reinstate its main exchange in the U.S. and is cooperating with the CFTC to lift the ban.
SBI Holdings' $289 million acquisition of Bitbank will create Japan's largest crypto exchage; US senators from both parties urge the CFTC to investigate Polymarket's "deceptive marketing."
According to ChainCatcher and BBX data, Japan's largest financial group completed its most significant crypto acquisition over the weekend, while US senators from both parties launched a new regulatory offensive against prediction market platforms. Key developments include: SBI Holdings, Inc. (Tokyo Stock Exchange: 8473) announced the acquisition of Japanese crypto exchage Bitbank (privately held) for approximately $289 million. Upon completion of the transaction, SBI's crypto business will surpass all competitors, creating Japan's largest crypto exchage. SBI Holdings is one of Japan's largest independent financial services groups, already owning crypto-friendly online bank SBI Shinsei Bank, crypto asset custody institution SBI Digital Asset Holdings, and numerous Bitcoin mining and crypto venture capital investments. Bitbank is one of Japan's largest spot BTC exchanges and holds a formal crypto exchage license from the Japanese Financial Services Agency (FSA). This acquisition marks a full shift in the approach of traditional Japanese financial institutions towards the crypto space, moving from "strategic testing" to "large-scale acquisition-driven" strategies. Together with the joint stablecoin plan (targeting March 2027) of the three major banks—Mitsubishi UFJ ($MUFG), Sumitomo Mitsui ($SMFG), and Mizuho ($MFG)—it constitutes the most concentrated wave of crypto deployments by the Japanese financial industry in 2026. On June 28, US Senators John Curtis (Republican, Utah) and Adam Schiff (Democrat, California) jointly wrote to the CFTC, urging it to launch a formal investigation into the prediction market platform Polymarket (privately held), citing a "concerning" investigative report on Polymarket's "deceptive marketing" practices, alleging systemic misrepresentation in user acquisition and risk disclosure. This is the third time this year that Congress has launched a regulatory offensive against prediction market platforms (the House Oversight Committee previously launched an insider trading investigation on May 22); the fact that the two senators are from opposing parties carries significant implications. For Robinhood Markets, Inc. (NASDAQ: $HOOD), this investigation creates indirect pressure—Robinhood's prediction market/event contract business (which saw record daily trading volume in June) faces the same regulatory characterization controversy as Polymarket; however, Robinhood's advantage lies in the fact that its CFTC-designated contract market (DCM) license application is in progress, giving it a clearer compliance path than Polymarket.
Research: Approximately 60% of Polymarket's first World Cup bettors had no prior experience with blockchain, making prediction markets a new gateway to crypto.
According to ChainCatcher, citing Cointelegraph, a study of Polymarket's 857,000 active users revealed that approximately 60% of first-time bettors during the World Cup had never previously interacted with blockchain protocols. Alvin Kan, COO of Bitget Wallet, stated that prediction markets have changed the traditional logic for crypto users to get on board—users no longer need to understand blockchain technology beforehand, but participate directly because they have opinions on real-world events. This makes prediction markets a new entry point for some users into the crypto space. Data shows that Polymarket's World Cup champion contracts have exceeded $3.1 billion in trading volume, with sports contracts contributing over $4.9 billion in trading volume on Polymarket in the past 30 days, and reaching $8.5 billion on Kalshi, becoming the most significant trading category on both platforms.