Polymarket reportedly fires CMO after fake-trade probe

• Polymarket reportedly fires CMO Matthew Modabber after an internal review of its promotions.
• Review followed reports of staged wins and $2.5m paid through a personal PayPal account.
• Exit comes as Polymarket reportedly raises about $1bn at a $21bn valuation.

Polymarket has reportedly fired Chief Marketing Officer Matthew Modabber after an internal review of its promotional tactics, the New York Post reported last week.

The company has not confirmed the move. For the leagues, operators and suppliers that partner with Polymarket, it puts marketing controls and governance back on the due diligence agenda.

Out of the inner circle

Citing unnamed sources, the New York Post said the review began earlier this year after a series of incidents unsettled investors. Among them was an alleged scheme involving fake trades.

Modabber has led marketing since 2024. According to his LinkedIn profile, he was Polymarket’s 11th employee. The Post said he and CEO Shayne Coplan have been friends since high school.

According to the Post’s sources, Polymarket’s board concluded that Modabber was holding back the company’s effort to shed its startup image as it eyes a possible IPO. A source told the Post that a separation agreement is still being finalized.

Fake wins, real money

In June, a WSJ investigation reported that creators recruited for Polymarket’s campaign had posted videos of trades that were not real. The videos falsely showed customers winning about $1.9m and presented simulated trades as genuine gains.

The Post’s reporting goes a step further. Its sources said the internal review examined claims that Modabber’s team built a fake webpage to promote those staged videos.

Politico opened a second line of scrutiny on June 5. It found that Modabber had sent more than $2.5m through a personal PayPal account to over 800 recipients between January 2025 and February 2026.

At least $350,000 of that went to social media creators. Politico found that at least 20 paid creators had posted about Polymarket on X more than 490 times without disclosing the payments. The account was registered to an email address linked to Salad House, the Milan salad chain Modabber co-founded.

The Federal Trade Commission requires influencers to disclose any material connection to the brands they promote. A Polymarket spokesperson told Politico that working with influencers is standard business practice. The spokesperson declined to discuss the company’s disclosure policies or Modabber’s use of a personal account.

Regulators and courts close in

In June, Senators Adam Schiff and John Curtis asked the Commodity Futures Trading Commission (CFTC) to examine Polymarket’s promotions. The regulator has since opened an investigation into the company’s marketing practices. That probe is ongoing, and no wrongdoing has been established.

On June 26, the National Association of Consumer Advocates (NACA) sued Polymarket in the Superior Court of the District of Columbia. The complaint names Coplan and Modabber personally and brings its claims under the District’s Consumer Protection Procedures Act.

NACA alleges deceptive marketing, undisclosed paid endorsements and unfair promotion of gambling to college-age consumers. It is seeking restitution, disgorgement of profits and a permanent injunction. None of the allegations have been tested in court.

States are adding to the pressure. On September 24, New York Governor Kathy Hochul and Attorney General Letitia James sued Polymarket, alleging that it runs an illegal, unlicensed gambling operation.

Growing pains at the top

The reported firing caps a difficult week for Polymarket’s leadership.

On October 20, Bloomberg reported that Founders Fund had discovered something during its 2025 due diligence. Coplan had charged private jet trips, his apartment rent and other personal costs to the company.

Peter Thiel’s firm would not invest until Coplan paid the money back. He repaid it, and Founders Fund went on to invest at a $1.2bn valuation, according to Bloomberg. A Polymarket spokesperson told the outlet the flights were business travel and that Coplan had disclosed the costs proactively.

Bloomberg also reported that Intercontinental Exchange (ICE) and Founders Fund have both recommended that Coplan hire a chief operating officer, which he has not yet done.

Separately, the National Futures Association threatened to drop Polymarket as a client over its record-keeping. One person told Bloomberg the issue has since been fixed.

Coplan responded in a statement to Bloomberg:

“There were real growing pains, and I personally had to grow and change into what the company needed.”

Partner risk in focus

Polymarket has signed a run of commercial deals with established sports brands, including a multi-year LaLiga partnership. Those deals put partners’ logos alongside Polymarket’s promotions, so any disclosure failure becomes a reputational issue for them as well.

Investor appetite has held up. 1789 Capital is reportedly leading a raise of about $1bn at a $21bn valuation. That would be more than double the $9bn valuation set by ICE’s 2025 investment.

The commercial picture is tighter. Polymarket now trails Kalshi in trading volume. Across the sector, prediction markets have just recorded their first $11bn weekend.

Paid acquisition channels are narrowing too. Google now bars prediction market ads in five US states, even for federally regulated exchanges. That puts more weight on creators and sponsorships, which are the channels now under review.

Polymarket has yet to name Modabber’s successor or publish the findings of its review. Those decisions, and the outcome of the CFTC probe, will show partners how far the cleanup goes.