On Wednesday the Manhattan apartment of Polymarket CEO Shayne Coplan was raided by the FBI, who seized his phone and other electronic devices but did not place him under arrest.
Speaking to The New York Post, which first reported the raid, a source close to Coplan said the 26-year-old businessman hadn’t been told why he was being investigated and branded the incident “grand political theater at its worst.”
Polymarket, which allows real-time betting on a range of outcomes, attracted attention during the 2024 presidential election for the generally favorable odds it gave Republican candidate Donald Trump of winning. On October 22 it gave Trump, who would emerge victorious with 312 Electoral College votes, a 64.3 percent change of victory versus just 35.7 percent for Democratic candidate Kamala Harris.
According to The New York Post, the raid began at around 6 a.m. on Wednesday when Coplan was woken up and instructed to hand over a number of electrical devices.
When approached for comment by Newsweek, an FBI spokesperson said they “cannot confirm or deny or comment on the matter.” Newsweek also contacted Polymarket for comment on Thursday via email outside of regular office hours.
The source close to Coplan said the FBI “staged a so-called raid so they can leak it to the media and use it for obvious political reasons.”
They added: “This is obvious political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election.”
In an X post on Wednesday Coplan jokingly wrote: “New phone, who dis?”
He later added: “It’s discouraging that the current administration would seek a last-ditch effort to go after companies they deem to be associated with political opponents.
“We are deeply committed to being nonpartisan, and today is no different, but 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.”
On Polymarket, which claims to be “the world’s largest prediction market,” gamblers use cryptocurrency to purchase shares in certain outcomes taking place, such as Trump’s election victory. Each share is valued at between $0.00 and $1.00, and the higher the figure the more likely the market thinks that event is to take place. Betting on Polymarket is banned in the U.S., though it is believed users have been using virtual private networks (VPNs) to get around this.
Separate investigations by blockchain companies Chaos Labs and Inca Digital found evidence of significant wash trading on Polymarket. Wash trading is an illegal practice in which shares in an event are repeatedly purchased and sold to create the illusion of more intense market activity.
Stock photo showing the seal of the FBI hanging in the Flag Room at the bureau’s headquarters March 9, 2007 in Washington, DC. The FBI seized several devices from Polymarket CEO Shayne Coplan when they raided his New York apartment on Wednesday.
Chip Somodevilla/GETTY
Chaos Lab concluded around one-third of buying and selling on Polymarket’s 2024 presidential market was wash trading, which Inca Digital said the practice constituted a “significant portion of the volume” of trades taking place.
Speaking to Fortune, a Polymarket spokesperson said: “Polymarket’s Terms of Use expressly prohibit market manipulation.
“We strive to provide users with the fairest analysis possible and our transparency allows the market to decide.”
One Polymarket trader, nicknamed the “Trump whale” online, reportedly made around $48 million in profit betting on the Republican nominee to convincingly win the 2024 presidential election.
In an interview with The Wall Street Journal the man, identified only as a French former bank trader using the assumed name “Théo,” said he became convinced mainstream polling was overstating Harris’s chances and commissioned his own “neighbor polls” to support this view.
In response to the FBI raid on Coplan Elon Musk, a close Trump ally who will co-head his new Department of Government Efficiency, commented: “This seems messed up.”
Brian Armstrong, the CEO of the largest U.S. cryptocurrency exchange Coinbase, wrote: “This will backfire—they just made Polymarket even more powerful.”
British bookmaker William Hill is offering odds of 2/5 (71.4 percent) on Donald Trump completing a full four-year second presidential term in the White House.
Update 11/14/24 9:50 a.m. ET: This story has been updated following contact with an FBI spokesperson.
