Original | Odaily Planet Daily (@OdailyChina)
Author｜jk
Recently, media reports indicated that the prediction market platform Polymarket hinted at a token issuance plan in documents submitted to the U.S. Securities and Exchange Commission (SEC). A review of the SEC's public database confirms that this speculation has some basis.
According to the SEC EDGAR public database, Polymarket's operating entity Blockratize Inc. did submit a Form D financing disclosure document at this time. Although there is a discrepancy in timing (the submission date was actually August 1), the logical basis for the media's speculation is not unfounded, and the document indeed contains terms that are typically viewed as signals for future token issuance in the cryptocurrency industry.
For this prediction market giant, which has reached a valuation of $1 billion and has transitioned from a regulatory gray area to full compliance, the emergence of token issuance rumors is not surprising; it may signify that Polymarket is preparing to embark on a new chapter in its development journey.
The "Code" in the Form D Document
According to the SEC EDGAR database, Polymarket's operating entity Blockratize Inc. submitted a Form D document on August 1, 2025, disclosing its latest round of financing. Notably, the document mentions "other warrants" or "other rights to acquire another security."
In the cryptocurrency industry, such expressions are often seen as signals for future token issuance. Due to the unclear legal status of tokens in the U.S., companies typically cannot directly mention token issuance plans in SEC documents, so they use terms like "warrants" to reserve the right for investors to obtain tokens in the future. This has become a common practice in the cryptocurrency industry when conducting traditional equity financing.
The document shows that the total financing amount is $257.5 million, with $135.4 million already sold, leaving approximately $122 million, with 23 investors participating.
From Departure to Return: How Polymarket Secured Its Position as a Compliant Prediction Market Leader
From Regulatory Vacuum to Iron Fist Crackdown
To understand Polymarket's current situation, one must review its tumultuous development history. Founded by Shayne Coplan in 2020, the company initially operated as a decentralized prediction market based on blockchain technology. Users could bet on various real-world events using the stablecoin USDC, covering a wide range from political elections to sports events.
The platform's technical architecture is quite ingenious. It is built on Ethereum smart contracts and later migrated to the Polygon network to enhance scalability. Users can participate in transactions simply by connecting a Web 3 wallet, without the need for identity verification, making the entire process fully decentralized. This design allowed Polymarket to initially evade traditional financial regulation, as it did not involve fiat currency transactions and had no centralized fund custody.
In October 2020, Polymarket secured $4 million in seed funding led by Polychain Capital. As the platform's influence grew, it subsequently completed a $25 million Series A funding round led by General Catalyst, followed by a $45 million Series B funding round led by Peter Thiel's Founders Fund in 2024, with Vitalik Buterin also participating in the investment. By mid-2025, Polymarket's valuation had reached approximately $1 billion.
In its early days, although Polymarket prohibited U.S. residents from using the service in its terms of service, enforcement was relatively lax. Many of the most popular markets revolved around U.S. topics, such as presidential election outcomes and Federal Reserve policies, and a significant portion of users were believed to be from the U.S. The platform launched over 900 markets within 18 months, showing strong growth momentum.
A Blow from the CFTC
By mid-2021, Polymarket's high-profile performance and U.S.-centric markets began to attract regulatory attention. On January 3, 2022, the U.S. Commodity Futures Trading Commission (CFTC) initiated enforcement action against Polymarket, accusing it of offering unregistered binary options contracts to U.S. customers without proper licensing.
The CFTC argued that each "yes/no" event market on Polymarket effectively constituted a binary options swap, which, under the Commodity Exchange Act, can only be offered on registered exchanges or swap execution facilities. Polymarket had neither obtained designated contract market approval nor applied for swap execution facility qualification.
Ultimately, the two parties reached a settlement, with Polymarket agreeing to pay a $1.4 million civil penalty while committing to prohibit U.S. users from accessing the platform and ceasing the provision of non-compliant event contracts. CFTC enforcement division acting director Vincent McGonagle emphasized in a statement, "All derivatives markets must operate within the law, regardless of the technology used, including so-called decentralized finance."
Survival Abroad and Ongoing Pressure
After the settlement, Polymarket implemented geographic restrictions—U.S. users were banned from accessing the platform. However, the platform continued to serve users in other parts of the world and achieved significant growth in 2023 and 2024. To enhance user experience, Polymarket also introduced instant conversion features from fiat to cryptocurrency through MoonPay and Stripe.
During the 2024 U.S. presidential election, Polymarket's trading volume surged, despite the official ban on U.S. users participating. Reports indicated that some U.S. users still accessed the site through VPNs, which had become an open secret in the community. To strengthen compliance, Polymarket began implementing identity verification for high-volume traders at the end of 2024 to prevent circumvention of geographic restrictions.
However, regulatory pressure did not ease as a result. In May 2024, the CFTC even proposed new rules to completely ban event contracts related to U.S. election outcomes, reflecting ongoing regulatory concerns about political prediction markets. More seriously, just after the November 2024 U.S. elections, the FBI raided CEO Shayne Coplan's residence, seizing Coplan's electronic devices as part of a joint investigation by the CFTC and the Department of Justice into whether Polymarket violated the 2022 settlement agreement.
2025: A Glamorous Turnaround
2025 became a turning point for Polymarket. After months of behind-the-scenes negotiations, the CFTC and the Department of Justice withdrew their investigation into Polymarket in mid-July, without further charges. This outcome coincided with a change in the U.S. government and regulatory leadership.
Days later, Polymarket announced a significant deal: acquiring QCX LLC and its affiliated clearinghouse QC Clearing LLC for $112 million. QCX is a relatively obscure entity that applied for designated contract market approval as early as 2022 and received CFTC approval in July 2025. By acquiring QCX (now renamed "Polymarket US"), Polymarket effectively obtained a full CFTC exchange license and clearing license.
"Now, by acquiring QCEX, we are laying the groundwork to bring Polymarket back home—re-entering the U.S. market with a fully regulated and compliant platform, allowing Americans to trade their views," Coplan announced in the acquisition press release.
This move paved the way for Polymarket to relaunch in the U.S. under CFTC oversight. In early September, the CFTC granted Polymarket's newly acquired exchange division a no-action relief, exempting it from certain swap reporting and record-keeping requirements that would normally apply to event contracts. This no-action letter effectively greenlit Polymarket to legally offer prediction markets in the U.S., as long as it operates within the specified parameters.
Combined with the designated contract market and designated clearing organization licenses obtained through QCX, Polymarket can now list event-based binary options in a regulated venue. The platform is expected to implement full KYC/AML compliance requirements for U.S. users and adhere to CFTC rules regarding product oversight and reporting.
Notably, U.S. regulatory attitudes toward such markets in 2025 seem more open than a few years ago. The acting chair of the CFTC even commented that the agency had become mired in "legal uncertainty" while pursuing prediction market cases, suggesting a more lenient stance.
The Real Basis for Token Issuance Rumors
Against this backdrop, rumors of Polymarket potentially issuing tokens have gained a more solid foundation. The mention of "other warrants" in the Form D document, combined with the company's current development stage and improved regulatory environment, makes token issuance plans quite feasible.
Of course, this speculation still relies on industry practices and indirect evidence rather than official confirmation. However, considering that Polymarket has transformed from a DeFi project operating on the regulatory edge to a fully regulated U.S. derivatives exchange, launching a native token aligns with its on-chain industry DNA and would further solidify its leading position in the prediction market space.
From its wild growth in a regulatory vacuum in 2020, to facing the CFTC's iron fist in 2022, and then achieving compliance through acquisition in 2025, Polymarket's development trajectory serves as a microcosm of the cryptocurrency industry's path toward regulation. Now, as the regulatory environment gradually clarifies and the company's compliance system continues to improve, this prediction market giant may be preparing to embark on a new chapter in its development journey.
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