DoJ, CFTC End Biden-Era Probe Into Polymarket

Nine months after what Polymarket CEO Shayne Coplan called a “last-ditch effort” to go after companies deemed to be associated with President Biden’s political opponents, the Trump administration’s Department of Justice has shut down two investigations into the crypto-betting platform.

Polymarket CEO, Shayne Coplan

Bloomberg reports, according to a person with direct knowledge of the matter, that the predictions exchange received formal notice earlier this month from the US Justice Department and Commodity Futures Trading Commission that the probes had ended.

Polymarket’s popularity surged during last year’s election campaigns as users flocked to the platform to place cryptocurrency wagers on the outcome.

But that also drew investigators, examining whether the site was accepting trades from US-based users in violation of a previous settlement with federal regulators.

Bloomberg reports that The CFTC had its own investigation into the platform. The derivatives regulator, which oversees prediction platforms because their contracts are considered akin to swaps, had entered into a settlement with Polymarket in January 2022 over allegations it failed to register with the agency.

As part of the deal, Polymarket vowed to wall off US traders from its exchange.

Both the CFTC and Justice Department lawyers in Manhattan were investigating whether the New York-based platform continued accepting wagers from people in the US using virtual private networks or other means to bypass the company’s controls. The prediction market notched about $2.6 billion in trading volume in November.

The situation escalated dramatically a week after the November elections, when FBI agents carried out a pre-dawn raid at the Soho penthouse of CEO Shayne Coplan.

The decisions are the latest example of US authorities reversing course on Biden-era actions involving digital-asset firms, and comes as some in Washington are celebrating what’s being billed as “Crypto Week” with plans to usher in industry-backed rules that have sent the price of Bitcoin to a record.

Polymarket has been building a war chest with new investment rounds led by Peter Thiel’s Founders Fund.

It also recently announced a partnership with Elon Musk’s X and xAI to offer event forecasts on the social media platform.

The resolution of the two investigations may even pave the way for Polymarket to officially re-enter the US market.

That could include registering with the CFTC as a futures exchange or potentially acquiring another entity with a CFTC license.