Coinbase Receives CFTC Subpoena to Provide Data Related to Polymarket

The U.S. Commodity Futures Trading Commission is seeking information from Coinbase related to the cryptocurrency-based prediction market, Polymarket. The CFTC subpoena, which was disclosed in a customer notice earlier on January 8, was confirmed by sources briefed on the matter.

Coinbase reportedly informed its clients via email about the ongoing investigation, requesting general customer information, including data on user accounts.

Polymarket has been in the regulatory crosshairs for years. In 2022, it settled allegations from the Commodity Futures Trading Commission of running an unregistered derivatives trading platform with a $1.4 million fine and a cease-and-desist order that saw the site block U.S. customers. But regulators haven’t taken their eyes off the site’s operations.

The recent CFTC subpoena arguably escalates that investigation, not just into Polymarket’s compliance but also into user data practices. This follows reports of significant financial activity on the platform tied to the 2024 U.S. presidential election. It is reported that users who bet on Donald Trump’s victory earned up to $50 million, raising concerns over the potential for market manipulation on the platform.

In November, days after the victory of Trump, the FBI raided the New York apartment of Polymarket’s CEO, Shayne Coplan. The involvement of the FBI reflects a wider investigation by the Department of Justice into whether the site operates as an unregulated betting market.

Polymarket offers event-based binary options: users can wager on the outcome of events such as elections and sports matches. Such markets are decentralized—a factor that appeals to some cryptocurrency enthusiasts—but critics say they can be open to abuse.