Posted on: January 13, 2025, 09:14h.
Last updated on: January 13, 2025, 09:49h.
Coinbase has received a subpoena from the United States Commodity Futures Trading Commission (CFTC) regarding the investigation into Polymarket, a peer-to-peer prediction exchange based on cryptocurrency.
The CFTC oversees derivative markets, including futures, swaps, and options. The agency has broadened its focus to include controversial betting exchanges like Polymarket, which offered contracts on the 2024 presidential election.
Former CFTC Chair Rostin Behnam was against betting on the election. The CFTC is actively investigating Polymarket to determine if the exchange has allowed US customers.
Coinbase, a cryptocurrency exchange platform, has been subpoenaed in connection with the Polymarket investigation. The company has notified certain users about the requirement to disclose customer information to the CFTC.
Coinbase has been served with a subpoena seeking general customer information, including details related to user accounts,” the email stated. “No action is needed from users, but Coinbase may have to provide account information to the CFTC.”
In early 2022, Polymarket agreed to pay a $1.4 million civil monetary penalty to the CFTC for offering binary options contracts without proper registration. The Commodity Exchange Act mandates registration for companies offering such contracts.
Polymarket was also required to stop allowing US users to participate in its operations as part of the settlement.
Polymarket Controversy
Although most Polymarket users are from outside the US, some US players access the site through virtual private networks. The platform focuses heavily on events in the US.
Polymarket faced criticism for offering bets on Luigi Mangione, the alleged gunman in the murder of UnitedHealthcare CEO Brian Thompson. It has also received backlash for offering contracts on the ongoing Los Angeles wildfires that have resulted in fatalities.
Polymarket continues to offer various markets related to the wildfires. For instance, there is a market predicting when the Palisades wildfire will be fully contained, with a current favorite date before January 31 with a 74% chance.
Our aim is to provide relevant information to all those affected and help them make informed decisions,” a statement from Polymarket mentioned. “These markets address the same topics discussed in the media, but with transparent, probabilistic forecasts.”
Polymarket has waived fees on markets related to the wildfires.
Singapore’s Ban
Over the weekend, Singapore banned Polymarket, deeming it an illegal gambling site. The Gambling Regulatory Authority of Singapore stated that such exchanges are illegal gambling activities.
Gaming regulators in Singapore, home to major casinos like Marina Bay Sands and Resorts World Sentosa, identified Polymarket as an illegal gambling website hosted by an unlicensed provider.
The GRA warned that individuals caught gambling with unlicensed providers face fines up to S$10,000 and possible imprisonment for up to six months.