Senior officials at the Commodity Futures Trading Commission were forced out after raising compliance concerns about three crypto firms with alleged ties to the Trump family, according to a New York Times investigation published May 24.
The report details how career staff at the U.S. derivatives regulator who flagged issues at Polymarket, Crypto.com, and a Gemini affiliate were suspended and investigated by the end of 2025. The investigation suggests a potential link between the personnel changes and the firms' political connections.
Concerns raised by the officials included inadequate fraud protections at Polymarket, unfair treatment of small bettors at Crypto.com, and claims that a Gemini affiliate had not completed its required regulatory review. The New York Times reported that despite the warnings, former Acting CFTC Chairman Caroline D. Pham intervened on behalf of the firms. Donald Trump Jr. is an advisor to Polymarket, and Gemini's founders are financial backers of a firm co-founded by Eric Trump.
The revelations highlight growing concerns over regulatory independence as prediction markets face increased scrutiny. Polymarket, which paid a $1.4 million penalty in a 2022 settlement with the CFTC, is currently negotiating to lift restrictions that bar U.S. users. The controversy surfaces just before a June 5 deadline set by House Oversight Chairman James Comer for Polymarket and Kalshi to produce records in a separate probe.
The CFTC controversy is unfolding as Washington's focus on prediction markets intensifies. Representative James Comer (R-Ky.) launched a formal investigation into Polymarket and Kalshi on May 22, demanding records related to identity verification and the detection of anomalous trading.
Comer's probe was triggered by suspicious trading patterns, including a case where a U.S. Army soldier allegedly made $400,000 on Polymarket contracts related to Venezuelan President Nicolás Maduro. This congressional inquiry, separate from the internal CFTC events, adds another layer of pressure on the platforms to ensure market integrity and prevent the use of nonpublic information.
This article is for informational purposes only and does not constitute investment advice.
