Polymarket Faces CFTC Scrutiny Again
Regulators are turning up the heat on prediction markets. The Commodity Futures Trading Commission (CFTC) has issued a subpoena to Coinbase, requesting customer information linked to the Polymarket prediction platform.
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The CFTC’s subpoena specifically requests “general customer information” about users who interacted with Polymarket, a platform that saw a surge in popularity during the lead-up to the November U.S. presidential elections. The subpoena came to light after Eric Conner, founder of the Ethereum information hub ETHHub, shared a screenshot of an email from Coinbase on X (formerly Twitter).
The email noted that customer data might be shared with the CFTC as part of potential legal proceedings expected to begin within the next week. Such subpoenas are a standard legal tool for regulators seeking user information.
Polymarket, launched in 2020, allows users to place cryptocurrency bets on the outcomes of various events, including sports and political elections.
For more about the platform, check out our article: Polymarket: The Cryptocurrency Prediction Platform.
The latest developments add to a history of regulatory scrutiny faced by Polymarket’s founders. In 2022, the Commodity Futures Trading Commission (CFTC) took enforcement action against the platform, citing its failure to register services with the agency. The case was resolved with a $1.4 million fine, and Polymarket subsequently ceased operations for U.S. users.
The challenges for Polymarket didn’t stop there.
Shortly after Donald Trump’s election victory, the FBI raided the New York apartment of Polymarket CEO Shane Coplan. The platform’s representatives called the raid an act of “political retaliation.” However, Bloomberg later revealed that the raid was part of an investigation led by the Department of Justice. Around the same time, France’s National Gambling Authority (ANJ) declared that Polymarket lacked authorization to operate in the country and ordered it to cease operations in France.
Despite mounting regulatory challenges, Polymarket continues to thrive, attracting billions of dollars in political betting. The platform’s list of investors includes high-profile names like Peter Thiel and Vitalik Buterin.
The CFTC’s recent request for user data from Coinbase regarding Polymarket raises broader concerns about the boundaries of regulatory authority in the crypto industry. Critics, including former CIA employee and privacy advocate Edward Snowden, have condemned Coinbase for its toxic and shameful compliance with regulatory demands. As tensions grow between regulatory enforcement and the need to protect user privacy, especially in Europe, this debate is likely to intensify.
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