The FBI Searched the House of the Head of the Polymarket Cryptocurrency Betting Service
On the US platform Polymarket, users place cryptocurrency bets on the outcomes of events related to economics, politics, sports and other sectors.
The US Department of Justice is investigating the activities of cryptocurrency betting platform Polymarket, Bloomberg reports citing an anonymous source. The service is suspected of accepting bets from US users, a practice that has been banned since 2022.
On the US platform Polymarket, users place cryptocurrency bets on the outcomes of events related to economics, politics, sports, and other sectors. Two years ago, the company had blocked access to US users as part of an agreement to settle a lawsuit brought by the US Commodity Futures Trading Commission (CFTC), while also paying a $1.4 million fine.
This year, Polymarket's popularity increased significantly ahead of the US presidential election on 5 November. Participants showed a strong interest in political predictions, opening numerous bets on different options for election results. The volume of such bets exceeded USD 3 billion. According to reporters, authorities are seeking to charge the service with market manipulation and falsifying statistics in favour of Donald Trump.
The Federal Bureau of Investigation (FBI) issued a search warrant for Polymarket CEO Shane Koplan. Agents seized his phone and electronic devices, reports the New York Post on the evening of 13 November. Koplan, however, was not arrested.
Polymarket stated that the company "will defend itself and its community" and suggested that the FBI search could be politically motivated.
"It is disheartening that the current administration is making a last-ditch effort to persecute companies it believes are linked to political opponents. Polymarket has helped tens of millions of people this election cycle, but has not harmed anyone. We are very proud of that," Koplan wrote.
Regulatory Concerns About Polymarket
Polymarket's business model, which combines decentralised finance (DeFi) and betting, falls into a regulatory grey area. Authorities are investigating whether Polymarket has circumvented traditional gambling regulations. The combination of crypto assets and unregulated betting practices is a wake-up call for agencies such as the FBI and the Securities and Exchange Commission (SEC), which see such platforms as potential risks for money laundering and deception of investors.
Polymarket Strengthens Access Controls in the United States Following Increasing Regulatory Attention after a French Trader Wins $45 Million.
As previously reported, US users continued to find ways to participate in the service's cryptocurrency betting despite the blockade. In this regard, Polymarket recently announced that it has taken further steps to verify and block users it believes may be US citizens or located in the United States, journalists write.
Additional attention to the platform has been aroused by a French trader who earned over $45 million by predicting the outcome of the US presidential election on 5 November. The trader claims to have no political ambitions and to be motivated solely by financial interest. However, now the French gambling regulator, the ANJ, is also scrutinising Polymarket's operations for compliance with local laws.
Conclusion
The recent FBI search at the residence of Polymarket's CEO highlights the growing regulatory challenges faced by cryptocurrency betting platforms. This investigation could set a precedent on how authorities approach cryptocurrency-based betting services, possibly leading to stricter oversight to ensure financial security and regulatory compliance.
The US Department of Justice is investigating the activities of cryptocurrency betting platform Polymarket, Bloomberg reports citing an anonymous source. The service is suspected of accepting bets from US users, a practice that has been banned since 2022.
On the US platform Polymarket, users place cryptocurrency bets on the outcomes of events related to economics, politics, sports, and other sectors. Two years ago, the company had blocked access to US users as part of an agreement to settle a lawsuit brought by the US Commodity Futures Trading Commission (CFTC), while also paying a $1.4 million fine.
This year, Polymarket's popularity increased significantly ahead of the US presidential election on 5 November. Participants showed a strong interest in political predictions, opening numerous bets on different options for election results. The volume of such bets exceeded USD 3 billion. According to reporters, authorities are seeking to charge the service with market manipulation and falsifying statistics in favour of Donald Trump.
The Federal Bureau of Investigation (FBI) issued a search warrant for Polymarket CEO Shane Koplan. Agents seized his phone and electronic devices, reports the New York Post on the evening of 13 November. Koplan, however, was not arrested.
Polymarket stated that the company "will defend itself and its community" and suggested that the FBI search could be politically motivated.
Regulatory Concerns About Polymarket
Polymarket's business model, which combines decentralised finance (DeFi) and betting, falls into a regulatory grey area. Authorities are investigating whether Polymarket has circumvented traditional gambling regulations. The combination of crypto assets and unregulated betting practices is a wake-up call for agencies such as the FBI and the Securities and Exchange Commission (SEC), which see such platforms as potential risks for money laundering and deception of investors.
Polymarket Strengthens Access Controls in the United States Following Increasing Regulatory Attention after a French Trader Wins $45 Million.
As previously reported, US users continued to find ways to participate in the service's cryptocurrency betting despite the blockade. In this regard, Polymarket recently announced that it has taken further steps to verify and block users it believes may be US citizens or located in the United States, journalists write.
Additional attention to the platform has been aroused by a French trader who earned over $45 million by predicting the outcome of the US presidential election on 5 November. The trader claims to have no political ambitions and to be motivated solely by financial interest. However, now the French gambling regulator, the ANJ, is also scrutinising Polymarket's operations for compliance with local laws.
Conclusion
The recent FBI search at the residence of Polymarket's CEO highlights the growing regulatory challenges faced by cryptocurrency betting platforms. This investigation could set a precedent on how authorities approach cryptocurrency-based betting services, possibly leading to stricter oversight to ensure financial security and regulatory compliance.
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