U.S. Closes Investigations Into Predictions Market Polymarket
Federal authorities have concluded separate investigations into Polymarket, a blockchain-based predictions market that previously faced scrutiny over its operations. The U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) recently informed Polymarket that their inquiries had ended, according to a Bloomberg report citing an individual familiar with the matter. The development marks the end of a months-long examination into whether Polymarket allowed U.S. residents to circumvent trading restrictions. Earlier this month, the company reportedly received formal notifications from both agencies confirming the investigations’ closure. Focus on U.S. Users and VPN Concerns The DOJ probe, reported in late 2024, centred on Polymarket’s compliance measures aimed at blocking U.S. customers. According to Bloomberg, federal investigators and CFTC lawyers examined whether users in the United States were able to place wagers through virtual private networks (VPNs) or other methods designed to bypass geographic restrictions. In connection with the DOJ inquiry, the Federal Bureau of Investigation (FBI) had seized electronic devices belonging to Polymarket CEO Shayne Coplan. The New York Post, citing an anonymous source, reported that agents had taken Coplan’s phone and other electronics during the course of the investigation. Polymarket, which operates markets where participants can trade on the outcome of real-world events, has faced regulatory challenges in the past. The platform’s approach raised concerns about whether some of its offerings qualified as illicit binary options under U.S. law. Settlement with CFTC and Compliance Measures In 2022, Polymarket settled with the CFTC over allegations it offered unregistered binary options contracts to U.S. users. As part of the agreement, the company paid a $1.4 million fine, shuttered non-compliant markets, and pledged to strengthen controls to block U.S. residents from participating. The conclusion of the DOJ and CFTC investigations suggests that federal authorities were ultimately satisfied with Polymarket’s compliance steps or lacked sufficient evidence to bring additional charges. Neither agency publicly disclosed the specific findings leading to the end of their probes. Polymarket has not released an official statement regarding the matter. The DOJ, CFTC, and FBI also declined to comment when contacted by reporters. The case highlights the ongoing regulatory attention directed at blockchain-based trading platforms, particularly those involving predictions or wagers. While Polymarket has avoided further penalties for now, the broader industry remains under scrutiny as authorities monitor compliance with U.S. financial and gambling laws.
