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Federal agents arrived unannounced at Polymarket CEO Shayne Coplan’s New York City apartment early Wednesday morning and seized his phone and electronics, citing a Department of Justice investigation, according to sources, New York Post reported.
Though Coplan has not been arrested or charged, the FBI’s actions follow Polymarket’s controversial US election market, which processed more than $3 billion in trading volume and predicted Donald Trump’s victory a week before his official win.
While the FBI has not commented on the nature of the investigation, sources close to Coplan allege political retribution, suggesting that federal authorities are attempting to penalize Polymarket for its Trump-leaning market predictions, the tabloid reported.
Being reported that the FBI raided Polymarket founders home this morning & seized his phone and electronics.
— RYAN SΞAN ADAMS - rsa.eth 🦄 (@RyanSAdams) November 13, 2024
They gave him no reason.
Polymarket predicted Trump would win.
This looks like political retribution and is actually bone chilling.
WTF is this administration doing. pic.twitter.com/QaBKrSNA2x
Polymarket’s election market indicated a clear edge for Trump, with trading odds standing in stark contrast to traditional polling, which portrayed the race between Trump and Vice President Kamala Harris as close.
These sources have gone so far as to accuse the government of targeting the company for “political theater” and speculate that the Department of Justice may accuse Polymarket of manipulating its odds in favor of Trump.
The federal probe marks a renewed examination of the prediction market’s influence on political sentiment and trading practices. This is not Polymarket’s first run-in with U.S. regulators. In early 2022, the platform faced a settlement with the US Commodity Futures Trading Commission (CFTC) for alleged regulatory violations. To settle, Polymarket paid a $1.4 million penalty and committed to restricting access for US users while winding down non-compliant markets. However, reports persist of U.S.-based bettors using VPNs to bypass the platform’s geo-restrictions, a practice Polymarket’s Terms of Use expressly prohibit but has been difficult to monitor and enforce.
Coplan’s platform enjoys high-profile financial backing from billionaire Trump supporter Peter Thiel, which critics argue raises potential conflicts of interest. Thiel’s $70 million investment in Polymarket earlier this year has fueled speculation that the platform could favor right-leaning narratives.
Blockhead
Polymarket has publicly maintained its neutrality, claiming it offers an independent and transparent marketplace for gauging public opinion and understanding pivotal events.
"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 non-partisan, 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," Coplan said a post on X earlier today.
The crackdown on Polymarket has far-reaching implications for decentralized finance (DeFi) and blockchain-based prediction markets. Polymarket, one of the most prominent platforms in the space, has positioned itself as a pioneering market, delivering insights through decentralized betting on significant events. Its appeal lies in its ability to democratize access to market insights and predictions, a value proposition that has helped it attract an international user base.
However, the regulatory scrutiny also highlights the persistent challenges DeFi platforms face when dealing with election markets—a topic that remains controversial even within the CFTC, which is still divided on allowing US-based platforms to run such markets.
