Coinbase Subpoena from CFTC

Coinbase has received a subpoena from the U.S. Commodity Futures Trading Commission (CFTC) regarding information related to Polymarket, as reported by sources from The Block.

Ongoing Investigation Alerts

The U.S. exchange has been alerting clients via email about the investigation. Screenshots shared on social media confirm this, with Decrypt being the first to report on it.

A screenshot shared by Ethereum commentator Eric Conner states:
> “We write to inform you that Coinbase has been served with a subpoena in the above-referenced matter seeking general customer information that includes information related to your account(s).”

The email’s subject reads “CFTC Subpoena to Coinbase In The Matter Polymarket (C9453) Customer Notice.” The message was sent from [email protected] and indicates that no action is required from users, while Coinbase might not have to send customer information.

A Coinbase spokesperson explained, “In some cases, we may be required by law to share necessary data lawfully sought after by the government. Where necessary, we will seek to narrow requests that are overly broad or vague in order to provide a more appropriately tailored response, and in some cases, we object to producing any information at all (such as if the request is legally insufficient).”

Polymarket Overview

Polymarket gained attention during the lead-up to the November U.S. elections, despite being geofenced to prevent U.S. users from betting. The platform amassed over $9 billion in cumulative trading volume in 2024, according to The Block Research.

Regulatory Scrutiny and CFTC Actions

In 2022, Polymarket settled with the CFTC for allegedly offering illicit binary options contracts, agreeing to pay a $1.4 million fine and taking steps to block U.S. users continuously.

CFTC has maintained strict regulations on betting markets. For example, Kalshi underwent a lengthy court battle to list contracts related to U.S. elections due to CFTC concerns about election fairness.

Prediction Markets

Traditionally limited to academic economics, prediction markets allow users to bet on future events and aggregate collective wisdom. Predictions made by invested users are believed to be less biased.

Ongoing Government Inquiries

Polymarket faces increased scrutiny from the U.S. government, with a raid by the FBI on CEO Shayne Coplan’s NYC apartment leading to the seizure of his devices. Coplan reportedly faces a Department of Justice probe over alleged U.S. users, which he claims is politically motivated.

Polymarket also took voluntary steps to block users in France following scrutiny from its gaming regulator.

Despite challenges, reports indicate that U.S. users have been bypassing the platform with VPNs. During the presidential election, Polymarket gamblers wagered over $3.7 billion, and the platform peaked with 314,500 active traders in December.