FBI Raids Polymarket CEO’s Home Following Platform’s Accurate Election Prediction

TLDR:

• FBI raided Polymarket CEO Shayne Coplan’s home on Nov. 13, seizing his phone and electronics
• DOJ investigating Polymarket for allegedly allowing U.S. users to access the platform
• Platform accurately predicted Trump’s 2024 election victory with $3.6B in trading volume
• Company spokesperson claims raid is “political retribution” by outgoing administration
• Polymarket previously settled with CFTC for $1.2M in 2022 for operating without registration

The Federal Bureau of Investigation (FBI) conducted an early morning raid on November 13 at the Soho residence of Polymarket CEO Shayne Coplan, seizing his electronic devices. The 26-year-old executive was not arrested during the operation, which began at 6:00 A.M. ET.

According to Bloomberg, the Department of Justice is investigating Polymarket for allegedly allowing U.S. users to access the prediction market platform. This comes after the company had previously reached a $1.2 million settlement with the Commodity Futures Trading Commission (CFTC) in 2022 for operating without proper registration.

The platform recently gained attention for accurately predicting Donald Trump’s victory in the 2024 presidential election. Polymarket saw over $3.6 billion in trading volume related to election outcomes, with its predictions proving more accurate than traditional polling methods.

A company spokesperson defended the platform, stating that Polymarket operates as a “fully transparent prediction market” that charges no fees and takes no trading positions. The spokesperson emphasized that all market data is available for public analysis.

Despite being officially off-limits to U.S. citizens following the 2022 CFTC settlement, reports indicate that Americans can still access the platform using virtual private networks (VPNs). CoinDesk confirmed that at least two U.S. residents successfully placed trades before the 2024 election.

The raid’s timing has sparked controversy, with a Polymarket spokesperson claiming it represents “political retribution” by the outgoing administration. The source suggested that authorities could have requested the devices through proper legal channels rather than conducting an early morning seizure.

Law enforcement agents reportedly did not provide a clear explanation during the raid. The FBI has not responded to requests for comment about the operation or its objectives.

Coplan addressed the situation on social media platform X, making a light-hearted reference to the morning’s events with the post “New phone, who dis?” He later described the raid as “discouraging” and characterized it as a “last-ditch effort” targeting companies potentially associated with political opponents.

new phone, who dis?

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

The CFTC had previously expressed concerns about prediction markets potentially undermining election integrity. This stance was challenged recently when Kalshi won a court victory against the CFTC’s attempts to prevent listing political event contracts.

Following Kalshi’s victory, several mainstream financial firms entered the prediction market space, including Robinhood and Interactive Brokers. However, the CFTC has filed an appeal against the Kalshi ruling.

The situation highlights ongoing regulatory challenges in the prediction market industry. While Polymarket maintains its position as a non-partisan information source, questions remain about the platform’s accessibility to U.S. users despite regulatory restrictions.

A CFTC spokesperson previously stated that Polymarket must follow its settlement terms, which explicitly prohibit accepting business from U.S. persons. However, attorney Aaron Brogan noted that VPN usage makes this restriction difficult to enforce in practice.

Polymarket’s spokesperson indicated that the company is prepared to defend itself, stating they “look forward to standing up for ourselves and our community and continuing to help everyday people understand important world events.”

The raid occurred amidst broader discussions about the role of prediction markets in elections. While some praised Polymarket’s accuracy, critics argued its odds were influenced by foreign money.

The platform’s election market resolution came after an overwhelming victory for Trump over Vice President Kamala Harris, despite mainstream pollsters describing the race as a tossup.