Crypto prediction market and election betting site Polymarket had its offices raided by the FBI yesterday (13 November).
The FBI search warrant came as part of a Department of Justice (DoJ) investigation into whether the event-based trading platform had allowed US-based to bet on the site, according to Bloomberg sources.
Under a 2022 settlement with the Commodities and Futures Trading Commission (CFTC), Polymarket agreed to block US users and pay a $1.4m penalty to escape further prosecution.
The business’ founder Shayne Coplan, who had his phone ceased by the authorities during the raid, criticised the government’s investigation on X.
He said: “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 and recognise that taking a more pro-business, pro-startup approach may be what would have changed their fate this election.”
While Polymarket geoblocks US users from placing bets on the platform, media reports have said many have evaded the ban using VPNs.
Polymarket predicts Trump victory
The news was first broken by Rupert Murdoch-owned tabloid New York Post, who quoted unnamed sources who alleged the investigation was “political retribution”.
This, they argued, was because the market had predicted a Donald Trump victory in the lead up to the presidential election, in contrast with the polls.
The market showed a 58.6% chance of a Trump win the morning before election day.
Reports indicated Polymarket’s pro-Trump outlook was driven by a tiny number of whales who placed large bets on the former president to win.
This included a single French account who had bet approximately $30m on a Trump victory based on a reported belief that the polls would again underestimate the former president, as they had in previous elections.
Coplan said last week Polymarket intends to return to the US following the election result.
This followed prediction market Kalshi’s success in convincing a federal appeals court to lift its freeze on its election event contracts that the CFTC had argued for.
This came despite the CFTC’s ongoing work in drawing up new rules that would ban election bets.