Polymarket considers tighter user checks as regulatory pressure grows

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Polymarket considers tighter checks

Highlights

Polymarket considers tightening user verification toward KYC standards after geoblocking 35 countries, including Iran and Russia, due to sanctions compliance concerns.
U.S. lawmakers launch a probe into Kalshi and Polymarket over potential insider trading risks as prediction markets face increased federal oversight interest.
Donald Trump and CFTC Chair Michael Selig call for exclusive CFTC jurisdiction over prediction markets, intensifying regulatory focus after scrutiny of sensitive event contracts.

Compliance review amid global restrictions

Cointelegraph reports that Polymarket is considering mandatory user verification requirements closer to Know Your Customer standards as authorities increase pressure over sanctions compliance and other legal exposures.

As of Wednesday, the platform has geoblocked 35 countries, preventing residents from placing orders. The restricted jurisdictions include Iran, Russia and North Korea, countries subject to sanctions by many governments over military conflicts.

Polymarket currently allows users to operate under pseudonyms, limiting public visibility into their identities and increasing potential legal risk around sensitive event contracts. The report follows broader concerns that anonymous trading on prediction markets can expose operators to compliance failures and enforcement action.

U.S. policy debate adds pressure

Federal oversight of prediction markets is also drawing fresh political attention in the U.S. President Donald Trump says on Tuesday on Truth Social that the Commodity Futures Trading Commission should have exclusive jurisdiction over prediction markets, aligning with comments from CFTC Chair Michael Selig.

That position emerges after lawmakers in the U.S. House of Representatives announce a probe into Kalshi and Polymarket over risks tied to elected officials and potential insider trading. The scrutiny comes as Polymarket offers contracts tied to major geopolitical developments, including the U.S.-Israel war with Iran.

Trump's son, Donald Trump Jr., is a strategic adviser to Kalshi and also an adviser to Polymarket, adding another point of attention as the regulatory debate expands. Polymarket did not immediately respond to a request for comment on the report.

In our earlier report on markets betting on Iran, we covered President Donald Trump’s negotiating red lines in talks aimed at a temporary deal to end the war, including opposition to Iran moving highly enriched uranium to Russia or China and a refusal to offer sanctions relief or cash. We also noted the Strait of Hormuz as the critical chokepoint for oil and global trade, with oil prices falling as investors priced in a lower geopolitical risk premium despite ongoing uncertainty.

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