FBI raids Polymarket CEO’s home amid DOJ probe into US betting allegations

Sankunni K November 17, 2024

SiGMA news

FBI raids Polymarket CEO’s home amid DOJ probe into US betting allegations

The Federal Bureau of Investigation (FBI) agents raided the New York City home of Polymarket CEO Shayne Coplan early Wednesday morning, seizing his phone and other electronic devices. The raid, which took place in Coplan’s SoHo apartment at 6 a.m., follows last week’s U.S. presidential election, during which Polymarket, an offshore, cryptocurrency-powered betting platform, placed unusually high odds on Donald Trump’s victory over Vice President Kamala Harris.

The U.S. Department of Justice (DOJ) is currently investigating Polymarket for allegedly allowing U.S.-based users to bet on the platform, a violation of federal gambling laws, according to Bloomberg News. Polymarket’s structure relies on cryptocurrency and operates outside of the U.S. jurisdiction, although it has gained considerable attention for its political betting markets. The company declined to address specific allegations of illegal U.S. user activity but suggested the raid was “obvious political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election.”

While Coplan, 26, was not taken into custody or arrested, the FBI’s interest in his devices signals the seriousness of the federal probe into Polymarket’s operations. An FBI spokesperson declined to talk to media on the matter, and neither the DOJ nor the White House responded to requests for comment.

Polymarket’s betting trends and controversy

Polymarket gained significant media attention leading up to the presidential election for its unorthodox betting trends, showing Trump’s odds as markedly higher than those reflected in most U.S. opinion polls. The disparity drew curiosity and fuelled scrutiny of the platform, particularly as a prominent, mysterious French trader, dubbed the “Polymarket whale,” made substantial bets on Trump’s victory, which reportedly yielded him a profit of over $46 million.

Polymarket operates without allowing official U.S.-based trading; however, it faced additional scrutiny following the trader’s bets. This activity coincided with a sharp rise in Trump’s odds on the platform, sparking speculation about market influence and transparency.

Regulatory concerns beyond the U.S.

The controversial bets have prompted inquiries beyond U.S. borders. Last week, France’s gambling regulator announced an investigation to determine whether Polymarket complies with French betting regulations. The outcome of the French probe could impact the platform’s access to European markets, adding further pressure to the crypto-based betting platform amid legal scrutiny.