Author: Azuma, Odaily Planet Daily
When the FBI Comes Knocking
The New York Post reported today that sources revealed that Polymarket founder Shayne Coplan's home in SoHo, New York was raided by the Federal Bureau of Investigation (FBI) - around 6:00 AM local time, Coplan was woken up at home and FBI law enforcement officers demanded that he hand over his phone and electronic devices, but did not arrest Coplan.
Bloomberg later followed up, reporting that the reason for this raid was that the U.S. Department of Justice (DOJ) is investigating Polymarket, accusing the platform of violating an agreement it had reached with the Commodity Futures Trading Commission (CFTC) in 2022 to "prevent U.S. users from accessing" the platform, and continuing to accept transactions from U.S. users.
After the incident, Coplan himself subsequently posted two updates on X, the first of which was joking about getting a new phone... The second was a positive response stating: "It is disappointing that the current administration is taking a last-ditch effort to go after companies they perceive to be associated with political opponents. We are steadfastly committed to non-partisanship, as we have been throughout, but the current administration should do some self-reflection and recognize that taking a more business-friendly, more entrepreneurial approach might change the outcome of their next election. Polymarket provided value to tens of millions of Americans in this election cycle, without harming anyone. We are proud of that. I can say with my head held high that the future of America, especially the future of American entrepreneurship, has never been brighter. In the face of adversity, we will continue to build."
The U.S. Election and the Rise of Polymarket
Polymarket can be said to be the most prominent application in the cryptocurrency industry this cycle - perhaps even the only one.
Leveraging a series of prediction markets built around the U.S. presidential election, Polymarket experienced rapid growth in 2024. Around April this year, the platform's monthly trading volume was only around $40 million, but by October it had soared to $2.5 billion. During the election period, Polymarket saw a surge in traffic, with the cumulative trading volume for the 2024 U.S. presidential election alone exceeding $3.6 billion.
In addition, Polymarket has also disrupted the value of traditional media sources - while outlets like CNN were repeatedly reporting that Harris was leading in the polls, Polymarket consistently showed Trump as the frontrunner.
After Trump's eventual victory, Polymarket also announced its achievements on its official X account: "Polymarket has proven that prediction markets are wiser than opinion polls, media, and experts. Polymarket has consistently and accurately predicted the outcome, far outpacing these three, demonstrating the power of high-capacity, high-liquidity prediction markets like Polymarket has pioneered..."
"The Charge" Points to Allowing U.S. Users Access, But Is That Really the Case?
Based on media reports, the U.S. Department of Justice's accusation against Polymarket is that the platform is still accepting transactions from U.S. users, which violates the agreement Polymarket reached with the CFTC in 2021.
In January 2022, the CFTC had reached a settlement with Polymarket regarding the "provision of binary options products based on events", with Polymarket agreeing to pay a $1.4 million civil penalty, as the company had been operating in the U.S. without registration. As part of the settlement agreement, Polymarket promised to gradually cease service in the U.S. while continuing to operate internationally.
However, although U.S. users are technically no longer allowed to bet on Polymarket, the platform still has a large number of U.S. users - Forbes reported in August that Similarweb data shows 25% of Polymarket's website traffic still comes from the U.S.
In fact, the CFTC has consistently opposed the idea of platforms like Polymarket offering prediction markets related to elections. In addition to Polymarket, two other well-known prediction platforms outside the cryptocurrency industry, PredictIt and Kalshi, have also had disputes with the CFTC on this issue.
However, the industry generally does not believe that the U.S. Department of Justice's investigation of Polymarket is truly related to this matter - as Coplan emphasized, this may be politically motivated, and the New York Post's original report also quoted a source as saying "the current administration is likely trying to accuse Polymarket of market manipulation and manipulating opinion polls to support Trump."
Community Reaction
After the investigation incident was exposed this morning, various sectors of society have also voiced their support for Coplan.
Elon Musk directly replied to Coplan's second update: "That's right"; Coinbase CEO Brian Armstrong also more directly criticized the investigative action, believing that the Department of Justice's move is purely politically motivated, but this will only end up strengthening Polymarket's influence.
In addition, the meme community also quickly responded to this incident, with the market cap of the "FREE Shayne Coplan" meme token (with the token symbol of an "eagle") briefly surging to $30 million, with the theme of "Free Coplan".
But the problem is that Coplan was clearly not arrested, only had his phone confiscated, and he's still FREE... (Maybe this is just part of the meme)
Meme warriors gearing up to charge, please do your research and pay attention to risk control before taking action.
