Coinbase has received a subpoena from the U.S. Commodity Futures Trading Commission seeking information related to Polymarket, sources familiar with the matter told The Block.
The U.S. exchange has reportedly been sending emails to clients alerting them of an ongoing investigation, according to several screenshots posted on social media. Decrypt was the first to report on the news.
“We write to inform you that Coinbase has been served with a subpoena in the above-referenced matter seeking general customer information that includes information related to your account(s),” according to a screenshot shared by prominent Ethereum commentator Eric Conner.
The email subject line reads “CFTC Subpoena to Coinbase In The Matter Polymarket (C9453) Customer Notice.” It was sent from the [email protected] address and notes that action is not required from users and that Coinbase may not be required to send customer information.
“In some cases, we may be required by law to share necessary data lawfully sought after by the government,” a Coinbase spokesperson told The Block. “Where necessary, we will seek to narrow requests that are overly broad or vague in order to provide a more appropriately tailored response, and in some cases, we object to producing any information at all (such as if the request is legally insufficient).
Polymarket emerged as a standout blockchain-based app during the lead-up to the U.S. election in November. Despite being geofenced to prevent U.S. users from placing bets, the platform recorded a cumulative trading volume exceeding $9 billion in 2024, according to data from The Block Research.
In 2022, Polymarket settled with the CFTC for allegedly offering illicit binary options contracts. In return, It agreed to pay a $1.4 million fine, wind down its non-compliant markets and take preventative steps to block U.S. users on an ongoing basis.
The CFTC has taken a strict line in regulating betting markets. For instance, Kalshi, one of the few platforms approved to operate in the U.S., fought a long court battle for the right to list contracts related to U.S. elections due to CFTC concerns that it may unfairly sway outcomes.
Prediction markets, long the purview of academic economics, offer a way for users to bet on the likelihood of future events and, therefore, help aggregate the “wisdom of the crowd.” In theory, because users have skin in the game, their predictions will be less likely to suffer from bias.
This is not the first inquiry Polymarket has received from the U.S. government. In November, the Federal Bureau of Investigation seized Polymarket CEO Shayne Coplan's phone and electronics in a raid of his New York City apartment.
Coplan is reportedly facing a Department of Justice probe over alleged U.S. users, which Coplan has suggested is politically motivated.
Polymarket also voluntarily blocked users in France after the country’s gaming regulator began examining its operations and compliance initiatives.
Anecdotal reports of U.S. users bypassing the platform using VPNs have long plagued Polymarket, which surged in popularity during the election season. In all, Polymarket gamblers spent more than $3.7 billion placing bets on the presidential election.
Active Polymarket traders reached a new peak of 314,500 in December.
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