Coinbase Subpoenaed in Polymarket Probe, Platform Criticized for Wildfire Betting

Posted on: January 13, 2025, 09:14h. 

Last updated on: January 13, 2025, 09:49h.

Devin O'Connor @CasinoorgDevinO Read More

Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Coinbase has been subpoenaed by the United States Commodity Futures Trading Commission (CFTC) concerning the federal agency’s probe of Polymarket, a cryptocurrency-based peer-to-peer prediction exchange.

The CFTC governs derivative markets, including futures, swaps, and options. The independent agency’s scope has expanded in recent years to include controversial betting exchanges like Polymarket, which last fall offered contracts on the outcome of the 2024 presidential election.

Outgoing CFTC Chair Rostin Behnam opposed betting on the November election. The CFTC is amid an active investigation into the operations of Polymarket to determine if the wagering exchange has permitted US-based customers.

Coinbase, an online cryptocurrency exchange that allows users to buy, sell, trade, and store crypto, has been subpoenaed in the Polymarket inquiry. The company informed certain users about the federal order to disclose information about its customer base.

We write to inform you that Coinbase has been served with a subpoena … seeking general customer information that includes information related to your account(s),” the email notified. “No action is required from you, but Coinbase may be required to send information related to your account(s) to the Commodity Futures Trading Commission.”

In early 2022, Polymarket agreed to a $1.4 million civil monetary penalty with the CFTC for offering event-based binary options contracts without obtaining a designated contract market (DCM) concession with the federal regulator. The Commodity Exchange Act requires companies that offer such options and contracts to register with the CFTC.

The settlement terms also required Polymarket to stop allowing users from the US to participate in the New York-based outfit’s ongoing operations.

Polymarket Criticism 

Though most Polymarket users are based outside the US (some US-based players continue to access the site through virtual private networks), the exchange is heavily based on events happening in the US.

Polymarket continues to run numerous markets on the devastation. For example, more than $314K has been risked on when the Palisades wildfire will be fully contained. Before January 31 is the front-runner with an implied likelihood of 74%.

Our goal is to provide everyone affected with relevant information and to help them distinguish the signal from the noise,” a Polymarket statement read. “These markets address the same questions being discussed across cable news and X, but replace the punditry and speculation with transparent, probabilistic forecasts.”

Polymarket says it has suspended fees on markets related to the wildfires.

Singapore Bans Platform

Over the weekend, Polymarket was dealt another bad hand after Singapore banned the online wagering website. Singapore’s Gambling Regulatory Authority (GRA) said such exchanges constitute illegal gambling.

The GRA warns that individuals convicted of gambling with an unlicensed gambling service provider face a fine of up to S$10K and a prison term of up to six months.