Polymarket Files for Crypto Token Trademarks as Legal Battles Mount

Polymarket, a decentralized prediction market platform, has filed for trademarks related to its crypto tokens, signaling a strategic move to protect its intellectual property amid growing legal challenges. The platform has also announced a partnership with Circle Internet Group to transition to native USDC stablecoin for settlement. These developments come as regulatory scrutiny intensifies in the United States and globally.

The platform's decision to trademark its tokens aligns with its broader efforts to formalize its presence in the crypto space. By securing intellectual property rights, Polymarket aims to reinforce its market identity and protect against potential imitators. This move is also timely given the increasing attention from regulators and lawmakers.

Meanwhile, the partnership with Circle represents a key operational shift. Polymarket is moving away from bridged USDC (USDC.e) on the Polygon blockchain to native USDC issued directly by Circle. This transition is intended to enhance settlement efficiency and reduce reliance on cross-chain bridges.

Why Did This Happen?

The partnership with Circle is part of Polymarket's broader strategy to strengthen its infrastructure and market integrity. Native USDC, issued by Circle, is pegged one-to-one to the U.S. dollar and can be redeemed for fiat currency. This offers a more direct and transparent settlement mechanism compared to bridged tokens. Polymarket's founder, Shayne Coplan, emphasized that the move will support a consistent, dollar-denominated settlement standard.

The shift to native USDC is also a response to regulatory concerns. Bridged tokens have raised questions about cross-chain security and compliance, particularly in light of recent enforcement actions by the CFTC. By using native USDC, Polymarket aims to align more closely with regulatory expectations.

How Did Markets React?

Market participants have shown mixed reactions to these developments. On one hand, the move to native USDC is seen as a positive step toward improving transparency and reducing operational risk. On the other hand, the broader regulatory environment for prediction markets remains uncertain. Some industry observers argue that the legal battles facing Polymarket and similar platforms could deter new entrants and limit growth.

The legal challenges have also created uncertainty for users and investors. While Polymarket continues to operate in most markets, recent court actions in Nevada and Tennessee have limited its access to certain states. This has led to speculation about how the platform will adapt its operations to comply with state laws.

What Are Analysts Watching Next?

Analysts are closely watching the outcome of the legal battles and the potential for broader regulatory action. The recent court ruling in Nevada, which temporarily banned Polymarket from offering sports-related contracts, has raised questions about the applicability of federal preemption arguments. The court rejected the claim that the Commodity Exchange Act grants the CFTC exclusive jurisdiction over the platform's contracts.

This ruling could set a precedent for other states considering similar actions. Prediction market platforms may be forced to seek state licenses or restrict their offerings in jurisdictions with strict gambling laws. This could have a significant impact on liquidity and user growth.

The industry is also watching for developments in Congress. Lawmakers have introduced the Public Integrity in Financial Prediction Markets Act of 2026, which would bar federal officials from trading in prediction markets when holding non-public information or influence over outcomes. This reflects growing concerns about the potential for insider trading and market manipulation.