Polymarket seeks CFTC approval to reopen U.S. exchange access
Polymarket is pursuing a return of its main prediction market platform to U.S. traders after years of operating its core exchange overseas. A potential approval could strengthen its position against Kalshi in the domestic event-trading market and shift more activity under direct CFTC oversight.
Highlights
- Polymarket has recently discussed with the CFTC lifting its U.S. trading ban imposed after a 2022 settlement, potentially reopening main exchange access.
- With four CFTC commission seats vacant and Michael Selig as sole commissioner, the regulatory process for Polymarket may encounter fewer obstacles.
- Regulatory scrutiny of prediction markets intensifies amid state claims of unlicensed gambling, while a recent case revealed over $400,000 earned via illegal U.S. access to Polymarket.
CFTC talks and reopening path
As first reported by Bloomberg, Polymarket has discussed with Commodity Futures Trading Commission officials in recent weeks whether the company can lift its block on U.S.-based traders and restore access to its main exchange.The restriction has been in place since a 2022 settlement with the agency, after which Polymarket moved its main platform outside the U.S. The CFTC would need to vote to remove that block, according to the report.
The regulatory path may now be less complex because four commission seats are vacant, leaving Chairman Michael Selig as the only sitting commissioner. The CFTC also cleared a separate U.S.-only Polymarket platform last November after the company acquired a registered exchange, although that venue has not fully launched.
Regulatory scrutiny and market implications
Prediction markets allow users to trade contracts tied to future events such as elections, sports outcomes and economic data. The sector is facing growing scrutiny from several states, which argue that such products amount to unlicensed gambling operations.Selig has previously argued that states do not have authority to police prediction markets, saying that jurisdiction rests with the CFTC. The latest talks also come after authorities accused a soldier of using a Virtual Private Network, or VPN, to access Polymarket's international exchange and earn more than $400,000 from trades based on classified information.
Polymarket declined to comment.
Our earlier report on the CFTC’s push to use AI in its oversight detailed how Chairman Mike Selig wants to automate parts of crypto registration reviews and strengthen trade surveillance despite reduced staffing. That article also highlighted Selig’s view that the CFTC has exclusive jurisdiction over prediction markets, alongside stepped-up monitoring and enforcement actions in the sector.
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