How Prediction Markets and Crypto Firms Steamrolled a Watchdog Agency
By Sharon LaFraniere and David Yaffe-Bellany
The New York Times, May 24, 2026
Last fall, a high-stakes struggle took place behind the closed doors of an often overlooked federal watchdog agency: the Commodity Futures Trading Commission (CFTC). At issue were three companies linked to the Trump family’s business empire, each seeking the commission’s approval to expand into the rapidly growing and lucrative field of prediction markets.
The Rise of Prediction Markets
Prediction markets have captivated the American public and investors alike, enabling bets on a wide range of events—from geopolitical moves such as whether the United States will take over Cuba to more trivial matters like the color of President Trump’s next tie. These platforms not only drew significant money but also raised regulatory questions about fairness and fraud protections, especially given their connections to cryptocurrency operations.
Agencies and Concerns
Senior career officials at the CFTC voiced serious concerns. For example, Crypto.com was suspected of not adequately protecting small bettors, potentially undermining fairness. Polymarket, another company under scrutiny, appeared to lack sufficient safeguards against fraud. A third company, an offshoot of the crypto exchange Gemini, had not yet passed the agency’s mandatory review process before seeking to start operations.
Despite these troubling flags, it became apparent that Caroline D. Pham, then acting chairman of the CFTC, along with her senior counsel, actively intervened to facilitate approvals and concessions for these firms. Sources familiar with the agency’s internal dealings, speaking anonymously due to fears of professional retaliation, revealed that by Christmas 2025, staff members who pushed back against the companies’ applications were placed on leave, barred from the office, and subjected to internal investigations.
Internal Fallout and a Chilling Message
Notably, none of the sidelined officials were informed of specific charges or misconduct. Yet, among current and former agency employees, the unambiguous message was that challenging the interests of these cryptocurrency and prediction market companies—especially those tied to the Trump family—was unwelcome and risky.
The investigation also found similar patterns with three senior enforcement officials involved in cryptocurrency regulations who experienced comparable treatment. Their efforts to uphold regulatory frameworks were effectively undermined, casting doubt on the agency’s independence and commitment to strong oversight.
Connections to the Trump Family
All three firms seeking CFTC approval have ties to the Trump family business network. For instance, Polymarket received investment backing connected to Trump-affiliated entities. Gemini’s crypto offshoot founders are linked with 1789 Capital, a firm associated with Trump Media & Technology Group. Crypto.com also actively partnered with businesses tied to Trump family members, including Donald Trump Jr. and Eric Trump.
These connections raise significant questions about potential conflicts of interest and regulatory capture, where an agency designed to safeguard public interests appears to have been influenced or circumvented by politically connected private sector players.
Broader Implications
The CFTC’s approval of these firms has wider implications for the rapidly evolving markets involving cryptocurrencies and prediction platforms. As public and institutional interest surges, so does the need for stringent regulatory oversight to protect investors and ensure market integrity.
This episode underscores the challenges federal agencies face in maintaining independence amid increasing political and commercial pressures. It also highlights the risks for staff members who raise legitimate concerns about fairness, transparency, and potential fraud within cutting-edge financial sectors.
Conclusion
The New York Times’ investigation into the inner workings of the Commodity Futures Trading Commission reveals a cautionary tale of regulatory vulnerability. The ascendancy of prediction markets and crypto companies tied to powerful political actors may have steamrolled one of the nation’s key financial watchdogs, raising urgent questions about governance, accountability, and the future of financial market oversight.
The full article is available to subscribers at The New York Times.