Polymarket calls FBI raid on CEO ‘political retribution’

The FBI raided the Manhattan home of Polymarket CEO Shayne Coplan early Wednesday, Nov. 13. During the raid, agents seized electronic devices as part of a Justice Department investigation into allegations that the platform violated federal gambling laws.

Coplan, who wasn’t arrested, called the raid “discouraging” and accused the outgoing administration of targeting businesses perceived to be aligned with political opponents.

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Polymarket, in a statement, labeled the raid as “political retribution.”

It’s discouraging that the current administration would seek a last-ditch effort to go after companies they deem to be associated with political opponents. We are deeply committed to being non-partisan, and today is no different, but the incumbents should do some self-reflecting…

— Shayne Coplan 🦅 (@shayne_coplan) November 13, 2024

Polymarket is a crypto-based prediction market that allows users to trade contracts on the outcomes of events, including elections.

The platform gained significant attention during the 2024 presidential race for giving President-elect Donald Trump much higher odds of victory than traditional polls. This prediction proved accurate when Trump defeated Vice President Kamala Harris with 312 Electoral College votes.

Critics argue that Polymarket’s prediction model blurs the line between betting and market trading, fueling concerns about transparency and regulatory oversight. Unlike traditional betting sites, Polymarket lets users buy and sell contracts as odds shift, reflecting changes in market sentiment.

The platform has also been accused of market manipulation. Third-party investigations uncovered evidence of wash trading, an illegal practice in which traders artificially inflate activity by executing fake transactions.

Before the election, a French trader, dubbed the “Trump Whale,” reportedly earned $48 million betting on Trump’s victory. The large wagers raised questions about the platform’s influence and transparency during a politically charged election season.

This isn’t Polymarket’s first encounter with regulators. In 2022, the company paid the Commodity Futures Trading Commission a $1.4 million fine for failing to register with the agency. The platform also temporarily halted trading during that time.

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Additionally, users have reportedly circumvented U.S. betting restrictions by using virtual private networks (VPNs), highlighting enforcement challenges with cryptocurrency-based platforms.

Prominent tech industry figures have weighed in on the raid. Coinbase CEO Brian Armstrong warned that the move could backfire, increasing Polymarket’s visibility and influence. Elon Musk, a close ally of Donald Trump, criticized the raid, calling it “messed up” in a social media post.