- The Department of Justice is investigating Polymarket for allegedly accepting bets from US customers
- FBI agents raided Polymarket CEO Shayne Coplan’s home and seized his phone
- Polymarket previously paid a $1.4 million penalty to the CFTC and agreed to block US users
- Fortune has published reports about potential wash-trading on the platform
- A Kalshi executive allegedly attempted to spread information about wash-trading at Polymarket
DoJ Launches Investigation into Polymarket’s US Operations
Crypto prediction market Polymarket faces renewed regulatory scrutiny.
The Department of Justice has initiated an investigation into the platform’s alleged acceptance of bets from US-based customers.
The platform drew attention when its users strongly favored Donald Trump in election-related predictions, contrasting with mainstream forecasts.
FBI Raid on CEO’s Residence
Federal agents executed a search at the residence of Shayne Coplan, Polymarket’s 26-year-old CEO.
The FBI confiscated Coplan’s phone during the operation, though no arrest was made.
Coplan responded to the raid with apparent nonchalance, posting on X: "New phone, who dis?"
Regulatory History and CFTC Settlement
This investigation follows a previous settlement with the Commodity Futures Trading Commission (CFTC).
Polymarket agreed to pay a $1.4 million penalty and block access to US users as part of that settlement.
Allegations of Market Manipulation
Recent reports by Fortune have highlighted concerns about wash-trading (trading with oneself to create artificial market activity) on the platform.
A leaked email from a Kalshi growth executive allegedly attempted to alert journalists about wash-trading and money laundering activities at Polymarket.
Coplan’s Response to Allegations
Coplan characterized the investigation as a "last-ditch effort" by the current administration targeting companies perceived as aligned with political opponents.
He maintained Polymarket’s non-partisan stance, stating: "We are deeply committed to being non-partisan, and today is no different."
The CEO suggested that a more supportive approach to businesses and startups might have led to different election outcomes for the incumbents.
Competitive Tensions Surface
The leaked email involving a Kalshi executive has introduced additional complexity to the situation.
The executive’s social media account has since been set to private following the email’s circulation.
While these allegations continue to surface, no independent verification of the email’s contents or claims has been established.
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