U.S. regulators have officially concluded their investigation, providing a significant respite for the platform.
According to (Bloomberg), the U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) officially notified cryptocurrency prediction market platform Polymarket earlier this month that they have concluded their investigation. This investigation began during the Biden administration, primarily targeting whether Polymarket violated the settlement agreement reached with the CFTC in 2022, allowing U.S. users to bypass platform regulations through virtual private networks to place bets.
Polymarket CEO Shayne Coplan confirmed the news on the X platform, stating, 'On election night eight months ago, we were on top of the world because Polymarket accurately predicted the election results. But eight days later, the FBI broke down the door at 6 a.m. and took all my computers and phones.' Coplan emphasized that, after cooperating with the investigation, the platform was confirmed to have no wrongdoing.
Source: X Polymarket CEO Shayne Coplan stated that after cooperating with the investigation, the platform was confirmed to have no wrongdoing.
Since Trump took office, the U.S. Securities and Exchange Commission (SEC) has withdrawn over a dozen investigations and court cases against several cryptocurrency companies, and banking regulators have eased scrutiny on financial service companies wishing to engage in cryptocurrency business.
Trading volume surged to $2.6 billion during the election period, FBI raid sparks controversy.
Polymarket gained fame during the 2024 U.S. presidential election, allowing users to place prediction bets on various event outcomes using stablecoins. During the November election season, the platform processed approximately $2.6 billion in trading volume, with users betting billions of dollars on Trump's victory, forming a consensus before traditional polls.
However, this popularity has also attracted the attention of law enforcement. Eight days after the election, on November 2024, the FBI raided Coplan's apartment in New York's Soho district, seizing his phone and electronic devices. At the time, 27-year-old Coplan sarcastically responded on social media, 'New phone, who dis?'
Polymarket reached a settlement agreement with the CFTC in 2022, agreeing to pay a $1.4 million fine and cease services for U.S. users due to allegations of providing unregistered binary options contracts. Although the platform installed geofencing tools to block U.S. users, regulators questioned whether U.S. traders were still using the site.
Further Reading
Trouble After the Election! FBI Raids Polymarket CEO's Home, Is It Political Retaliation?
Trump administration policy shifts, cryptocurrency industry enters a friendly regulatory era.
The conclusion of the investigation aligns with a broader policy shift. Capitol Hill has marked the current legislative push as 'Cryptocurrency Week', and Congress plans to hold a House vote that could send the first comprehensive cryptocurrency bill to President Trump for signing. The White House also appointed former CFTC commissioner Brian Quintenz, a venture capital executive, to return and lead the derivatives regulatory agency, indicating a more friendly approach to regulating prediction markets.
The House is expected to vote on three cryptocurrency bills before the August recess, one of which could fundamentally change how the SEC and CFTC regulate digital assets. Under Trump's new administration, there has been a noticeable shift in attitude towards supporting cryptocurrency businesses, and this political shift likely influenced the decision to end the Polymarket investigation.
With the resolution of the investigation, Polymarket can now explore formally re-entering the U.S. market. Options include applying to operate as a designated contract market or acquiring an entity that already holds a CFTC license. The company recently announced a partnership with X and xAI to offer event predictions on the platform.
According to previous reports from (Crypto City), Polymarket was preparing to raise $200 million at a $1 billion valuation last month. The news of the investigation's conclusion may provide additional momentum for this fundraising, as the platform is now free from legal risks. The platform's monthly trading volume reached $1.16 billion in June, but the number of active traders dropped 9.4% from the previous month to slightly over 242,000 traders.
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'Polymarket escapes a disaster! U.S. regulators end investigation, will cooperate with xAI to布局 prediction market' was first published in 'Crypto City'.