U.S. authorities have formally closed investigations into cryptocurrency prediction market Polymarket, marking a major regulatory shift for the platform that confronted intense scrutiny following the 2024 elections. The Division of Justice (DOJ) and Commodity Futures Buying and selling Fee (CFTC) notified Polymarket this month that their probes had been terminated, in response to Bloomberg sources.
The investigations examined whether or not Polymarket violated U.S. restrictions by accepting bets from American customers by way of VPNs, regardless of a 2022 settlement the place the platform paid a $1.4 million penalty. This growth comes because the Trump administration pushes pro-crypto insurance policies, contrasting sharply with the enforcement-heavy method of the earlier administration.
Federal consideration peaked in late 2024 when FBI brokers raided the Manhattan dwelling of Polymarket CEO Shayne Coplan, seizing digital gadgets in a pre-dawn operation. Coplan publicly criticized the raid as politically motivated, claiming it focused corporations against Biden-era insurance policies.
Investigation Timeline
The CFTC initiated its probe in 2021, culminating within the 2022 settlement that required Polymarket to dam U.S. customers. Nevertheless, regulators remained involved about potential circumvention instruments, significantly in the course of the heightened exercise of the 2024 election cycle when customers wagered tens of millions on political outcomes.
Investigations intensified below the Biden administration, with the DOJ becoming a member of the CFTC in inspecting compliance failures. The FBI raid on Coplan’s residence in November 2024 represented probably the most aggressive motion, drawing criticism from crypto advocates who considered it as authorities overreach.
Political Context
The case closure aligns with the Trump administration’s broader crypto-friendly agenda, coinciding with Congressional votes on landmark digital asset laws. This represents a dramatic reversal from the earlier administration’s stance, the place Polymarket confronted potential existential threats from federal probes.
Coplan had overtly criticized Biden-era insurance policies, framing his firm’s authorized challenges as politically motivated. The decision suggests a regulatory thaw below the present administration, which has prioritized creating clearer frameworks for crypto companies somewhat than punitive enforcement.
Market Implications
With investigations closed, Polymarket can pursue its deliberate $200 million funding spherical and discover formal U.S. market re-entry methods. These embody potential CFTC registration as a futures alternate or acquisition of a licensed entity, which might legitimize its operations.
The platform lately secured funding from Peter Thiel’s Founders Fund and partnered with Elon Musk’s X platform to supply occasion forecasts. Regulatory readability positions Polymarket to capitalize on rising curiosity in prediction markets, significantly round political occasions and monetary outcomes.
This resolution alerts broader acceptance of crypto innovation below present management, doubtlessly accelerating comparable platforms’ growth. The decision arrives as Bitcoin trades close to document highs amid Washington’s “Crypto Week” initiatives.
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The dropped investigations sign decreased regulatory danger for crypto prediction markets, doubtlessly growing institutional curiosity within the sector. This growth coincides with broader market optimism as Congress finalizes landmark crypto laws anticipated to determine clearer operational pointers.
- Prediction Market
- A platform permitting customers to wager on real-world occasion outcomes utilizing cryptocurrency. These markets mixture crowd knowledge to forecast possibilities.
- CFTC
- The Commodity Futures Buying and selling Fee regulates U.S. derivatives markets, together with sure cryptocurrency merchandise and futures contracts.
- VPN (Digital Personal Community)
- Expertise that masks customers’ geographical location, enabling entry to region-restricted platforms like Polymarket from prohibited jurisdictions.
- Settlement
- A decision the place an organization pays penalties with out admitting guilt, as Polymarket did in its 2022 settlement with regulators.
This text is for informational functions solely and doesn’t represent monetary recommendation. Please conduct your personal analysis earlier than making any funding selections.
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Editor-in-Chief / Coin Push Dean is a crypto fanatic primarily based in Amsterdam, the place he follows each twist and switch on the planet of cryptocurrencies and Web3.