Coinbase Subpoenaed by CFTC Over Polymarket Investigation Amid Betting Controversy
Coinbase, a major cryptocurrency exchange, has received a subpoena from the U.S. Commodity Futures Trading Commission (CFTC) as part of an investigation into Polymarket, a cryptocurrency-based prediction market platform.
Firefighters battle California wildfire
The investigation focuses on whether Polymarket has allowed U.S. customers to participate in its betting markets, despite a previous settlement prohibiting such activity. In 2022, Polymarket paid a $1.4 million penalty to the CFTC for operating without proper registration and agreed to stop serving U.S. customers.
Coinbase has notified affected users about the subpoena, which requires the company to share customer account information with the CFTC. The investigation comes as Polymarket faces criticism for controversial betting markets, including:
- Contracts related to the 2024 presidential election
- Bets on the Luigi Mangione murder case
- Markets on Los Angeles wildfire containment, which has drawn particular criticism for monetizing disaster outcomes
Polymarket has defended its wildfire-related markets, stating they provide "transparent, probabilistic forecasts" and has suspended fees on these markets. However, the platform continues to face regulatory challenges, with Singapore's Gambling Regulatory Authority (GRA) recently banning the platform and classifying it as an illegal gambling site.
The GRA's ban carries severe penalties for violations, including fines up to S$10,000 and potential imprisonment for up to six months for users who engage with unlicensed gambling services.
Despite restrictions, some U.S. users reportedly continue to access the platform through VPNs, while the majority of Polymarket's user base remains international, though largely focused on U.S.-based events.