Polymarket’s controversial betting practices under scrutiny

Coinbase platform has been subpoenaed in a CFTC investigation looking into the crypto-based prediction exchange.

US.- Coinbase has been subpoenaed by the U.S. Commodity Futures Trading Commission (CFTC) in connection with its investigation into Polymarket, a cryptocurrency-based prediction exchange.

The CFTC regulates markets for derivatives like futures and options, and its jurisdiction has expanded to include platforms like Polymarket, which previously offered contracts related to the 2024 U.S. presidential election. The CFTC is examining whether Polymarket allowed U.S.-based users to participate, which would violate regulations.

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Coinbase, a major cryptocurrency exchange, informed some users that it was required to provide customer information to the CFTC. This subpoena is part of the CFTC’s broader investigation into Polymarket, which faced legal trouble in 2022 when it agreed to a $1.4 million penalty for offering unregistered event-based binary options. As part of the settlement, Polymarket was also mandated to stop allowing U.S. users to engage with the platform.

Polymarket has drawn criticism for offering betting markets on sensitive events, including a wager on the murder of UnitedHealthcare CEO Brian Thompson. More recently, the platform has faced backlash for facilitating bets on the Los Angeles wildfires, which have claimed at least 24 lives. Critics argue that such markets exploit tragic events for profit.

Despite the criticism, Polymarket defends its platform, stating that it aims to provide transparent, probabilistic forecasts on topics being widely discussed, such as wildfires. The platform has suspended fees on wildfire-related markets, citing its goal of offering valuable information rather than speculation. Nonetheless, the ethical implications of betting on disasters remain a contentious issue.