The US government has launched at least three previously unreported investigations into trading on the prediction market Polymarket, according to documents obtained by WIRED through a Freedom of Information Act request.

These investigations, which include potential insider trading related to pardons issued by former president Joseph Biden, Iran event contracts, and Google-themed trades, shed light on the government's approach to regulating these markets. Voting records from the Commodity Futures Trading Commission (CFTC) reveal that these probes were initiated following suspicious trading patterns and reports by news outlets.

Despite the probes, Polymarket continues to operate, having secured a new round of funding valued at $21 billion, led by Donald Trump Jr.'s venture capital firm, 1789 Capital. The CFTC has also investigated Polymarket's archrival, Kalshi, with at least 32 cases referred to the agency by Kalshi.

Two arrests have already been made, including a US special forces officer who made profits from classified information and a Google engineer, Michele Spagnuolo, who is alleged to have made over $1.2 million from insider trades. Both are fighting back, claiming that their trades are a form of betting and not subject to commodities law.