Polymarket cleared as Trump administration ends crypto probes
Two federal investigations into crypto prediction platform Polymarket have been officially dropped, marking a shift in how US regulators approach digital asset firms under President Donald Trump’s administration. According to Bloomberg, both the Department of Justice (DoJ) and the Commodity Futures Trading Commission (CFTC) have ended their investigations into Polymarket.
The probes were launched during the Biden administration and focused on two key areas: whether Polymarket allowed US-based users to place bets in violation of regulatory restrictions, and whether it enabled unregulated trading related to the 2024 US Presidential election.
Investigations wrap up amid policy reversal
The end of these inquiries reflects a broader reversal in US regulatory direction. Under President Biden, the DOJ and CFTC launched separate probes to examine whether Polymarket allowed US-based users to place bets on political and real-world events, despite an earlier settlement requiring it to block American traders.
According to Bloomberg, the DOJ and CFTC notified Polymarket this month that the investigations are closed. Officials from the company and the two agencies declined to comment on the record.
FBI raid and legal scrutiny
The investigations gained momentum shortly after the November 2024 elections. A week later, FBI agents raided the New York penthouse of Shayne Coplan, the 27-year-old CEO of Polymarket. They seized his phone during the early morning raid, sparking strong reactions from the crypto community.
Coplan responded publicly, calling the operation a “last-ditch effort” to target companies seen as politically aligned against the Biden administration. The raid followed suspicions that Polymarket was still accepting wagers from users in the United States through virtual private networks (VPNs), despite previous assurances to the contrary.
Polymarket’s regulatory past
Polymarket previously settled with the CFTC in January 2022. The regulator, which oversees prediction platforms that offer event-based contracts similar to swaps, alleged that the platform operated without proper registration. As part of the settlement, Polymarket agreed to restrict US-based users.
The CFTC’s renewed investigation centred on whether the platform complied with that agreement. At the same time, DOJ lawyers in Manhattan were also looking into possible violations related to US user activity.
Trump administration’s crypto pivot
The conclusion of the probes comes as the Trump White House takes a more crypto-friendly stance. The administration is backing a wave of legislation to support digital assets, and Congress is expected to pass new rules this week that may reshape how cryptocurrencies are regulated in the US.
The week has been informally dubbed “Crypto Week” in Washington, with digital asset firms welcoming the change in tone. The shift has also helped push Bitcoin prices to record highs.
Polymarket eyes us re-entry
With investigations behind it, Polymarket may now explore a return to the US market. Options under consideration include registering with the CFTC as a designated contract market or acquiring a firm that already holds a CFTC licence.
The company has continued to expand globally and reported trading volumes of approximately $2.6 billion in November 2024. Polymarket’s rising influence in the prediction market sector has also drawn investment from notable players. Founders Fund, led by billionaire investor Peter Thiel, is among its major backers.
Growing industry influence
Polymarket recently partnered with Elon Musk’s social media platform X and his artificial intelligence venture xAI. The deal aims to offer event forecasts directly to users of the social platform, positioning the prediction exchange for broader exposure.
Meanwhile, Andreessen Horowitz’s crypto arm, a16z, is gaining more influence in Washington. Brian Quintenz, a former CFTC commissioner and a board member of Kalshi, a Polymarket competitor, has been nominated to lead the CFTC under Trump. This suggests prediction markets may see increased policy focus in the near future.
