US Federal Investigators Close Probes into Polymarket
In a recent development, US federal investigators have closed parallel criminal and civil probes into prediction market Polymarket. Both the Justice Department and the Commodity Futures Trading Commission (CFTC) issued letters earlier this month, ending their inquiries into the platform, as reported by Bloomberg News.
Polymarket allows traders to bet on yes-or-no outcomes using stablecoins on Polygon. The platform came under scrutiny following a CFTC settlement in January 2022, which required it to exclude US customers. Subsequently, investigators looked into whether American users were still participating in trades through virtual private networks.
During November’s US election season, Polymarket processed approximately $2.6 billion in volume, drawing law-enforcement attention as trading activity surged.
Regulatory Reset
Eight days after the November vote, agents raided CEO Shayne Coplan’s SoHo apartment and seized his phone, escalating the matter. Coplan criticized the search as an overreach linked to the outgoing Biden administration’s stance on digital asset companies.
In a post on July 15, Coplan stated that the platform had cooperated with authorities and had been cleared of any wrongdoing, emphasizing that “justice prevailed.”
The decision to close the probes reflects a broader policy shift as Congress prepares to vote on a comprehensive crypto bill during what has been termed “Crypto Week.”
Path to Licensed US Marketplace
With the investigations concluded, Polymarket can now explore possibilities for re-entering the US market. This may involve applying to operate as a designated contract market or acquiring an entity with a CFTC license.
The platform recently announced a partnership with X and xAI to offer on-platform event forecasts, signaling potential expansion under a compliant framework.
Following a settlement with the CFTC in 2022, Polymarket agreed to pay $1.4 million and delist three markets. The company also implemented geofencing tools to restrict access for US traders, addressing concerns raised by regulators.
The closure of the probes signifies that Polymarket has met its obligations and could now proceed with any licensing applications without immediate legal risk, while keeping abreast of evolving regulatory discussions.