Subpoena Details and User Notification
Coinbase confirmed receipt of a subpoena from the U.S. Commodity Futures Trading Commission (CFTC) seeking general customer information related to its investigation of Polymarket, a blockchain-based prediction platform. The subpoena, titled “CFTC Subpoena to Coinbase In The Matter Polymarket (C9453) Customer Notice,” was issued as part of a broader regulatory inquiry. Coinbase has informed affected users via email, explaining that while no immediate action is required from them, compliance with the subpoena may involve sharing specific account data.Coinbase’s Legal Approach
The exchange assured users that it would work to limit the scope of the CFTC's requests. “We object to requests that are overly broad or vague and aim to narrow them where necessary,” a Coinbase spokesperson said. In cases where legal grounds are insufficient, the company stated it would refuse to provide information altogether.Regulatory Scrutiny of Polymarket
Polymarket, which gained prominence during the 2024 U.S. election cycle with a trading volume exceeding $9 billion, has faced regulatory scrutiny in the past. In 2022, it settled with the CFTC for $1.4 million over allegations of offering unlicensed binary options. The platform also agreed to block U.S. users and wind down non-compliant markets. Despite these efforts, Polymarket remains under investigation, with reports of users bypassing restrictions through VPNs.Implications for Prediction Markets
The CFTC's strict stance on prediction markets extends beyond Polymarket. Other platforms, like Kalshi, have also faced regulatory battles. These actions underline the challenges faced by blockchain-based prediction markets in navigating U.S. regulations while maintaining their appeal to users.
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