Regulators Greenlight Polymarket’s Return Amid Crypto Rapprochement

The U.S. Commodity Futures Trading Commission (CFTC) has cleared the path for Polymarket to resume operations in the United States, marking a significant regulatory milestone for the crypto-based prediction market. On September 3, Polymarket's CEO, Shayne Coplan, announced the approval on X, citing the CFTC staff's adoption of a "no-action position" regarding swap data reporting and recordkeeping obligations for event contracts. This decision followed a request from QCX, a CFTC-licensed derivatives exchange that Polymarket acquired for $112 million in July 2025 [1].

The CFTC's approval allows QCX to operate within specific boundaries without facing enforcement actions, effectively removing a key regulatory barrier for Polymarket’s return to the U.S. market. Prior to this, the platform had been restricted from serving U.S. users since 2022 after being fined $1.4 million for offering illegal event-based options. The regulatory crackdown led to a federal investigation that continued until July 2025, when both the Department of Justice and the CFTC closed their inquiries into the company [1].

The CFTC’s no-action letter, issued at the staff level and not by the full commission, aligns with previous regulatory leniency shown toward binary options and similar event-based contracts. While the letter does not explicitly address prediction markets, it clarifies that the CFTC will not enforce recordkeeping rules for event contracts under the current interpretation [2]. This shift in regulatory approach has been interpreted as part of a broader easing of tensions between U.S. regulators and the crypto industry, with competing platforms such as Kalshi also benefiting from increased operational freedom.

The timing of the CFTC’s decision is notable, as it follows recent investments into Polymarket. In late 2024, 1789 Capital, a venture capital fund backed by Donald Trump Jr., began investing in the firm after the ’s re-election. The VC fund’s investment was reportedly contingent on Polymarket securing the necessary regulatory approvals to operate in the U.S. [1]. Additionally, the CFTC’s evolving stance may reflect the broader policy environment under Trump’s administration, with Brian Quintenz, the president's nominee for CFTC chair, expressing support for prediction markets as potential hedging tools during congressional testimony.

Polymarket, headquartered in New York City, is one of the largest platforms for trading on real-world events such as U.S. election outcomes, cryptocurrency price movements, and pop culture developments. Users bet using cryptocurrency, and the platform has seen high-profile trades, including one that netted a trader $3,000 from a bet on Taylor Swift’s engagement status [1]. The CFTC’s decision is expected to expand the platform’s user base and increase competition in the U.S. prediction market sector.

The approval also signals a potential shift in how regulators view the intersection of crypto and event-based trading. Acting CFTC Chairman Caroline Pham acknowledged the need for the agency to move away from what she described as a "sinkhole of legal uncertainty" in previous enforcement actions against similar firms. With the CFTC’s backing, Polymarket is now positioned to regain a foothold in the U.S. market, a market it was forced to exit after regulatory scrutiny in 2022. The outcome may set a precedent for how other event-based trading platforms navigate U.S. regulatory requirements in the future.

Source:

[1] Polymarket wins CFTC approval to launch in U.S. (https://www.thestreet.com/crypto/markets/polymarket-wins-cftc-approval-to-launch-in-u-s)

[2] U.S. CFTC Gives Go-Ahead For Polymarket's New Exchange (https://www.coindesk.com/policy/2025/09/03/u-s-cftc-gives-go-ahead-for-polymarket-s-new-exchange-qcx)