Polymarket has been blocked for U.S. users since 2022. – Credit: Thomas Fuller/SOPA Images/LightRocket/Getty Images
More than three years after prediction-market startup Polymarket was blocked in the U.S. as part of a settlement with the Commodity Futures Trading Commission for failing to register as a derivatives trading platform, the company announced it had found a path back into the country.
“Polymarket has acquired QCEX, a CFTC-regulated exchange and clearinghouse, for $112 million,” founder and CEO Shayne Coplan wrote on X on Monday. “This paves the way for us to welcome American traders again. I’ve waited a long time to say this: Polymarket is coming home.”
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Established in 2020, Polymarket allows users to bet on the outcomes of events ranging from national elections to the timing of a potential Israel–Hamas ceasefire, Bitcoin reaching a certain price threshold, how many times Elon Musk will post online in a given week, and when the next version of ChatGPT may be available. Right now, on the website, you can even see hundreds of thousands of dollars in trading volume around the opening weekend box-office take for the latest Smurfs movie as well as the question of whether the married executive recently caught embracing his company’s head of HR at a Coldplay concert will get a divorce.
However, Americans cannot legally participate in this prediction casino at the moment. That’s because the CFTC went after Polymarket shortly after it launched, accusing it of being an “illegal unregistered or non-designated facility for event-based binary options online trading contracts.” That investigation ended in January 2022. The final penalty of $1.4 million was lower than what Polymarket might have otherwise paid, thanks to their “substantial cooperation” with the agency, though it could not avoid winding down its U.S. markets in compliance with the Commodity Exchange Act.
The CFTC would investigate the company again, this time alongside the Justice Department, over concerns that Americans had continued to illegally gamble on the site, including on the outcome of the 2024 presidential election.
Even without Americans on the platform — apart from some unknown number using Virtual Private Networks, or VPNs, to disguise their locations — users staked a whopping $3.2 billion on the 2024 election, with the majority of the wagers placed on a Trump victory. Coplan, who had previously donated to a Super PAC backing Trump’s primary challenger, Florida Gov. Ron DeSantis, before going on to donate to Kamala Harris and other Democratic candidates, took note of Trump’s inclination to share his favorable odds from the site. “Trump himself becoming Polymarket’s biggest spokesperson was not on my 2024 bingo card,” he noted in one X post. Trades there also reflected some of the earliest predictions that Biden would drop out of the contest.
On election night, Coplan declared that Trump’s team had learned they’d clinched the race thanks to his company. “I just got word that the Trump campaign HQ literally found out they were winning from Polymarket,” he wrote on X. “History was made today. Surreal.” Days later, the FBI raided Coplan’s home in New York and seized his devices as part of an investigation into Polymarket allegedly allowing U.S. users to remain active on the site. A company spokesperson called it “obvious political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election.”
Coplan, for his part, wrote on X at the time that it was “discouraging that the current administration would seek a last-ditch effort to go after companies they deem to be associated with political opponents,” insisting that Polymarket was “deeply committed to being non-partisan.” He advised that “the incumbents should do some self-reflecting and recognize that taking a more pro-business, pro-startup approach may be what would have changed their fate this election.”
“I’m also proud to say that the future of America, and in particular American entrepreneurship, has never been brighter,” Coplan added, apparently enthusiastic about the incoming Trump administration. In March, he represented Polymarket at a White House Digital Asset Roundtable. “This admin’s commitment to collaboration with American innovators is revitalizing the American dream,” he posted on X when thanking the president for the invitation.
Earlier this month, Trump’s Justice Department closed down the probe into Polymarket that had been launched by the Biden administration, and the CFTC abandoned its own parallel investigation into whether Americans were still illegally gambling on the site. Coplan somewhat misleadingly claimed that the company had been “cleared of any wrongdoing.” In reality, just as the Securities and Exchange Commission under Trump had frozen its enforcement actions in the crypto industry — which spent tens of millions of dollars to return him to the White House — any question of charges were simply dropped.
The end of those legal woes left Polymarket free to acquire QCEX, a U.S.-regulated and licensed derivatives exchange, with the aim of restarting trading within the country. It won’t be the only place where Americans can bet on consequential politics, either, potentially contributing to what U.S. public health experts have described as a rise of gambling addiction in recent years that has been fueled by access to 24-hour online casino games.
In May, the CFTC abandoned its appeal of a federal judge’s ruling in September that another popular prediction market, Kalshi, could accept wagers on elections. Users there, as on Polymarket, accurately forecast a Trump victory as well as New York City mayoral candidate Zohran Mamdani winning the Democratic primary there last month. Kalshi had initially sought approval from the CFTC for election wagers in 2023, but the request was denied after several Democratic senators decried the idea in a letter to the agency, arguing that it would “profoundly undermine the sanctity and democratic value of elections” by introducing “financial incentives” into the process. Right-wing Silicon Valley billionaire Peter Thiel and Vitalik Buterin, co-creator of the cryptocurrency ethereum, nonetheless raised $70 million in funding for the platform shortly after. This January, Kalshi brought Donald Trump Jr. aboard as a strategic adviser for the firm.
All told, it appears that the leadership at these prediction markets, like the wealthy magnates of the closely entwined crypto scene, have found that the loosening of financial regulations during Trump’s second term has been good for business. Kalshi’s latest funding round saw it valued at $2 billion, while Polymarket is said to be nearing a $200 million round led by Thiel’s Founders Fund that would peg its value at $1 billion.
“This acquisition isn’t just about a license,” Coplan said of the QCEX deal on Monday, “it’s Polymarket’s homecoming, returning stronger and ready to serve American users once again.” He shared a link to join a waitlist for updates, with an American flag as the background for a two-word rallying cry: “We’re back.”
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