In 2022, the Commodities Futures Trading Commission accused Polymarket of having offered illegal trading services. Since then, as part of its settlement with the government, the site hasn’t operated inside the United States. However, the platform—which lets web users earn or burn cash via bets on anything and everything (from political races to farts)—now appears to be headed back to America, thanks in part to a recent business deal.
In a press release published Monday, Polymarket announced that it had acquired a CFTC-licensed derivatives exchange called QCX, LLC, and a clearinghouse, QC Clearing LLC, for $112 million. The site’s press release states that the acquisition “paves [the] way” for Polymarket’s “U.S. re-entry.” Shane Copley, the site’s CEO, said: “With the acquisition of QCEX, we are laying the foundation to bring Polymarket home — re-entering the US as a fully regulated and compliant platform that will allow Americans to trade their opinions.”
The new acquisition is certainly a big win for a platform that, over the past few years, has weathered accusations of market manipulation and been viewed with a highly skeptical eye by America’s major regulatory powers. A report last October alleged that there was evidence of “wash trading” on the site, a practice whereby trade volume is artificially inflated. Suspicions were also aroused by a particular whale betting large sums on the U.S. presidential election. That same month, the platform said that an internal investigation had “not identified any information to suggest” that its market had been manipulated.
Until recently, the government was also investigating Polymarket. Two different probes, one of which was led by the Justice Department and the other by the CFTC, were launched during the tail-end of the Biden administration (the DOJ probe sought to determine whether the site was still allowing U.S.-based bettors, while the CFTC investigation was concerned with bets made around last year’s presidential election). However, Bloomberg reported last week that the Trump administration had ended both of those probes. In the wake of this legal victory, Polymarket’s new acquisition seems to signal a brighter future for the site.
In recent times, Polymarket has made other moves that position it well for a reentry into the U.S. Last month, the site partnered with Elon Musk’s X, with the social media site announcing that Polymarket had been selected as its “official prediction market partner.” At the time, Coplan said that his site’s “real-time prediction market probabilities” could be combined with “Grok’s analysis and X’s real-time insights” to deliver “contextualized, data-driven insights to millions of Polymarket users.” As one of the biggest sites for online discourse about political and cultural topics, such a deal represents a huge opportunity for Polymarket, whose users bet on many of those same topics.
Read the full article here
