Key Insights:
- Polymarket has just been cleared of all charges by both the DOJ and CFTC.
- The Trump administration is taking a pro-crypto stance and is reversing Biden-era enforcement policies one by one.
- Polymarket’s growth is still on track, amid the more welcoming regulatory environment.
The online prediction market Polymarket has been cleared of any wrongdoing by both the U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC).
The investigations, which started during the Biden administration, have now been formally closed under the Trump administration with no charges filed. This is why this development is a major turning point in the ongoing debate over crypto regulation in the US.
No Charges on Polymarket After Lengthy Investigations
Polymarket had been under civil and criminal investigation for allegedly allowing U.S. users to place bets, despite a previous agreement with regulators to exclude them.
According to reports, the DOJ and the CFTC were looking into whether the company had violated federal rules after reaching a $1.4 million settlement with the CFTC in 2022. That fine was issued after Polymarket was found to be operating an unregistered event-based market.
Now, those investigations have been officially closed. According to a source familiar with the matter, Polymarket received formal “declination notices” from both the DOJ and the CFTC earlier this month. These notices confirmed that no further legal or regulatory action would be taken.
Polymarket itself has not issued a public comment on the matter. However, the decision has just cleared the company, especially as it prepares for a $200 million funding round at a reported $1 billion valuation.
FBI Raid on Polymarket and Political Backdrop
The investigation heated up late last year when FBI agents raided the New York City apartment of Polymarket CEO Shayne Coplan. They seized his electronic devices, but failed to charge Coplan despite the dramatic nature of the raid.
The Polymarket/FBI raid, what we know:
• FBI raided Polymarket founder Shayne Coplan’s home Wednesday morning
• FBI seized Coplan’s phone and other devices
• DOJ is investigating whether Polymarket allowed US users to place election bets (violating a 2022 settlement)
— Morning Brew (@MorningBrew) November 14, 2024
Coplan, who was a vocal critic of how the Biden administration handled crypto enforcement, claimed in November last year that the raid was politically motivated.
“It’s discouraging that the current administration would seek a last-ditch effort to go after companies they deem to be associated with political opponents,” he wrote at the time. He defended Polymarket as a valuable tool for public discourse and added, “Polymarket has provided value to millions of people while causing harm to nobody.”
The Regulatory Environment’s Shifts Under Trump
The decision to drop the investigations is part of the generally favorable environment for crypto under president Donald Trump.
Earlier this year, the Trump administration reversed several laws introduced during the Biden years. The Federal Reserve, for example, scrapped a requirement that forced banks to obtain pre-approval before engaging in crypto-related activities.
Trump just signed Executive Orders ordering the restoration of FREEDOM OF SPEECH, PREVENTING GOVERNMENT CENSORSHIP, pulled the US out of Paris Climate Accords, directed every Dept/agency in the gov to address rising cost of living, and rescinded 78 Biden disastrous EO policies. pic.twitter.com/L1J0orJWET
— ĐⱤØ₲Ø
Trump just signed Executive Orders ordering the restoration of FREEDOM OF SPEECH, PREVENTING GOVERNMENT CENSORSHIP, pulled the US out of Paris Climate Accords, directed every Dept/agency in the gov to address rising cost of living, and rescinded 78 Biden disastrous EO policies. 
(@KAGdrogo) This has so far made it easier for financial institutions to dip their toes in blockchain innovation.
Trump has also pushed aggressively for the passage of the GENIUS Act. It is aimed at creating a regulatory framework for stablecoins. Even though the bill recently stalled in the House of Representatives, Trump is confident that it will pass soon. His administration is also actively pressuring lawmakers for a vote before the August recess.
The CLARITY Act, another major piece of legislation, could also soften the scrutiny of digital assets. When combined, these efforts show a clear change in tone from the US government. One that favors innovation and industry growth over heavy-handed enforcement.
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