Fresh research suggests US traders are still reaching Polymarket's offshore exchange at serious scale, even after the platform agreed to block them. That makes the CFTC's next prediction-market rules more than a technical regulatory exercise.
The striking part is not that Americans found a way onto offshore prediction markets. It is how much money may have followed them there. According to Wired, a new study by Rutgers statistician Harry Crane estimates that US-based users accounted for between $10.6 billion and $26.7 billion in Polymarket trading from May 2025 through April 2026, even though the main offshore exchange has been formally off-limits to them since 2022.
That ban goes back to Polymarket's settlement with the Commodity Futures Trading Commission, when the company paid a $1.4 million civil penalty and agreed to wind down access for US customers after regulators said it had been operating an unregistered derivatives platform. On paper, that created a clear boundary. In practice, the boundary has always looked harder to enforce. Crypto wallets, VPNs, offshore servers, and pseudonymous accounts are not the same kind of target as a domestic broker with a branch office and a compliance desk.
The latest figures put numbers around a problem regulators have been circling for months. Crane's study estimates that US traders may have represented as much as 30% of activity on Polymarket's offshore venue during the period studied. That matters because Polymarket is no longer a niche crypto experiment. It has become one of the most visible prediction-market platforms in the world, with markets tied to elections, sports, corporate events, war, and regulatory decisions.
The enforcement concerns are no longer theoretical. In April 2026, federal prosecutors charged Army Special Forces soldier Gannon Van Dyke with using nonpublic military information connected to a planned operation involving Venezuelan President Nicolás Maduro to make roughly $400,000 on Polymarket. In May, prosecutors charged Google software engineer Michele Spagnuolo with using confidential company data to earn more than $1.2 million on the same platform. Both cases are allegations, but they show why prediction markets make regulators uneasy: when almost any event can become a tradable contract, inside information can come from far beyond Wall Street.
Polymarket has also been trying to build a legal path back into the United States. After the DOJ and CFTC ended earlier investigations into the company in July 2025 without new charges, Polymarket acquired QCEX, a CFTC-licensed derivatives exchange and clearinghouse, in a $112 million deal. The company later received CFTC approval for intermediated US market access and began expanding through a compliant US product. That is an important distinction. A regulated US version of Polymarket is not the same thing as opening the main offshore exchange to American traders.
That split is now the central issue. Polymarket's US-licensed product is constrained by federal rules and carries a narrower menu of markets. The offshore platform is where the much larger, more controversial activity still sits. Wired reported that Polymarket US handled about $1.6 billion in April 2026 volume, while the main platform processed roughly $9 billion that month. If Americans are already finding their way to the bigger venue, regulators have to decide whether tighter enforcement is realistic or whether legalization under clearer rules is the more practical answer.
The timing is awkward for Washington. CFTC Chairman Michael Selig, now the agency's sole commissioner, has taken a more favorable view of event contracts than the previous regulatory posture allowed. On June 10, 2026, the CFTC proposed rules that would formally allow sports-related prediction markets, with limits around injuries, officiating, fights, and high school sports. That move gives companies like Kalshi and Polymarket a clearer federal path, but it also intensifies the fight with state gambling regulators that argue these products look too much like sports betting by another name.
Institutional money has made the question harder to ignore. Intercontinental Exchange, the parent company of the New York Stock Exchange, agreed in 2025 to invest up to $2 billion in Polymarket at an $8 billion valuation. That kind of backing changes the conversation. Regulators may still dislike parts of the model, but the market is no longer easy to dismiss as a fringe offshore operation.
Political scrutiny is rising at the same time. House Oversight Committee interest in prediction markets has focused on whether public officials or government employees could exploit nonpublic information. State regulators have also pushed back, including Nevada's civil complaint against Polymarket and broader state actions against event-contract platforms. The result is a messy collision between federal commodities law, state gambling rules, crypto infrastructure, and a market that keeps growing faster than the rulebook around it.
The practical takeaway is straightforward. Prediction markets are becoming mainstream before regulators have settled what they are. If the CFTC creates a durable framework, Polymarket and its rivals could move more trading into supervised channels. If the agency hesitates, the offshore market will keep offering the same lesson it has already taught: demand does not disappear just because access is officially blocked.
Also read: Japan reclassifies crypto as a financial instrument, setting a template other major economies may soon feel pressure to follow • Japan slashes crypto taxes from 55% to 20% and suddenly Washington looks like the slow follower • DBS is bringing tokenized physical gold to retail banking customers in Singapore
