Polymarket Cleared by DOJ CFTC After 2024 Election Scrutiny

The U.S. Department of Justice (DOJ) and Commodity Futures Trading Commission (CFTC) have officially concluded their investigations into Polymarket, a prominent blockchain-based prediction market platform. This closure marks a significant shift in regulatory stance under the Trump administration, which has adopted a more favorable approach towards cryptocurrencies.

According to a report, Polymarket was formally notified earlier this month that both the DOJ and CFTC had concluded their inquiries without taking further action. The investigations aimed to determine whether the New York-based platform continued to allow U.S. residents to place bets, despite a 2022 settlement that prohibited such access. Neither the DOJ nor the CFTC issued public comments on the case, and Polymarket has maintained a measured response.

CEO Shayne Coplan shared his reflections on the ordeal in a personal post, describing the experience as traumatic but highlighting the platform's accuracy and resilience. He confirmed that Polymarket has been cleared of wrongdoing, stating, “Justice prevailed. God Bless America.”

Polymarket allows users to bet with cryptocurrency on real-world outcomes, including election results, geopolitical conflicts, economic indicators, and proposed legislation. The platform gained significant attention during the 2024 U.S. election cycle, with users heavily speculating on Donald Trump’s chances of returning to office. This attention, however, brought regulatory scrutiny. In 2022, the CFTC fined Polymarket $1.4 million for running an unregistered derivatives platform and ordered it to block U.S. users from placing bets.

Despite complying with the ban, regulators suspected that Polymarket may still have been accessed by American traders using VPNs or other tools to circumvent the restrictions. The situation escalated in November 2024 when the FBI raided Coplan’s Manhattan residence and seized electronic devices. The investigation focused on whether Polymarket had violated its earlier agreement by allowing disguised U.S. trading activity to continue.

In response to the closure of the investigation, Coinbase CEO Brian Armstrong publicly criticized the DOJ’s actions, stating that the government failed to prove there was something worth pursuing. He added that this incident highlighted how trust in institutions can be lost.

The decision to drop the investigations reflects a broader change in Washington’s stance toward digital assets and prediction markets under the Trump administration. At its peak in November 2024, Polymarket recorded a staggering $2.6 billion in monthly trading volume. While volume dipped to $1.1 billion in May 2025, activity remains strong. Polymarket now hosts over 21,000 markets with 1.2 million users and $700 million in active trading.

With the DOJ and CFTC inquiries officially closed, industry watchers believe Polymarket may explore reentering the U.S. market in a more regulated form. This could involve registering as a designated contract market (DCM) under the CFTC or acquiring a firm with an existing license. Polymarket has not stopped developing even during the CFTC and FBI investigations. The platform is in the midst of a major expansion effort, reportedly closing in on a $200 million funding round led by Peter Thiel’s Founders Fund.

Additionally, Polymarket recently announced a partnership with Elon Musk’s X and its AI division, xAI, to integrate prediction markets into the social media platform. Under this arrangement, Polymarket will offer real-time event forecasts that appear alongside user posts and commentary. However, the platform still faces scrutiny outside the U.S., with authorities in several regions placing restrictions on Polymarket, often citing gambling law violations. Allegations of market manipulation have also surfaced, although none have resulted in formal charges.

Polymarket’s main rival, Kalshi, recently won a legal victory against the CFTC when the watchdog moved to voluntarily dismiss its appeal of a ruling in Kalshi’s favor. This effectively conceded that election betting contracts may have a place in the American financial sector. With Polymarket now legally in the clear, the question remains whether the U.S. will allow the platform to operate under a regulated framework.