- DOJ and CFTC drop Polymarket probes, clearing path for U.S. market re-entry.
- Trump-era shift eases crypto oversight as regulators close major cases.
- Polymarket targets a $200 million funding round and plans to return to the U.S. via CFTC registration.
The U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) have ended their investigations into the crypto prediction platform Polymarket. According to the platform’s CEO, Shayne Coplan, both agencies issued formal notifications to the company confirming the end of their inquiries.
Probes Stemmed From Alleged Breach of 2022 Settlement
Polymarket first came under regulatory scrutiny following a 2022 accusation that the platform was offering unregistered binary options contracts. According to the agreement, Polymarket was obligated to close down the non-compliant markets, a fine of $1.4 million was imposed, and U.S.-based users were barred.
The CFTC still considers prediction markets derivatives platforms, which expose them to strict compliance with federal trading regulations.
During the 2024 U.S. election season, law enforcement expressed concern about increased activity on Polymarket. Although it was limited as part of the 2022 settlement between the company and the CFTC, users based in the United States were said to be placing bets using a virtual private network to bypass geographic restrictions.
Federal Bureau of Investigation agents allegedly raided the New York home of CEO Shayne Coplan, seizing his phone and electronic devices. Coplan criticized police action during the raid on social networks, stating that it was politically motivated.
The investigations attracted national interest, but none of the agencies has brought forward new charges. DOJ and CFTC ended their investigations without further penalties, highlighting a broader shift in the institutional approach to crypto platforms under the Trump administration.
Also Read | SEC and CFTC Explore Strategic Collaboration to Strengthen Crypto Regulation
Polymarket Prepares for U.S. Market Re-entry
In addition to the regulatory shift, Polymarket is considering a legal way to resume operating in the United States market. Among these options under consideration is listing with the CFTC as a designated contract market or purchasing an existing authorized organization. The decision has the potential to legitimize the platform in wider areas of the U.S. jurisdiction.
Polymarket’s growth supports its expansion plans. In June, the platform exceeded $1.16 billion in monthly trading volumes. It is also nearing an alleged raise of $200 million that could position it for a valuation of approximately $1 billion.
The company has also formed a partnership with Elon Musk’s X and xAI to bring event predictions to the social media platform.
Crypto Platforms Benefit From the Easing of Regulation
These settlements reflect a broader easing of the regulatory stance toward digital assets under the current administration. Since January, the Securities and Exchange Commission has dismissed a number of lawsuits, and bank regulators have relaxed their authority over crypto-related financial services.
The new regulatory environment seems friendlier to prediction markets. The CFTC abandoned an attempt to prevent the operation of Kalshi, a rival U.S.-based prediction market, in May 2022. Such actions indicate a possible policy shift toward an innovation-friendly oversight.
The appointment of a16z Crypto executive and former CFTC commissioner Brian Quintenz as the head of the agency also reflects the increasing influence of digital asset stakeholders in Washington.
Also Read | Bitcoin (BTC) to $150K? Polymarket Sees 85% Chance of New Highs by October
