CFTC Subpoenas Coinbase Over Polymarket Case:

The US Commodity Futures Trading Commission (CFTC) has reportedly issued a subpoena to Coinbase, the largest US-based crypto exchange.

Per the report, the commodities regulator seeks information related to the crypto-based prediction market platform Polymarket.

CFTC Subpoenas Coinbase: Implications for Users

EthHub co-founder Eric Conner shared the news in a post on X (Twitter), shedding light on Coinbase’s legal entanglements. According to a customer notice, Coinbase has reportedly informed its users of the subpoena. The exchange stated that while no immediate action is required from them, the exchange “may be required” to share certain user account data with the CFTC in response.

“We write to inform you that Coinbase has been served with a subpoena in the above-referenced matter seeking general customer information that includes information related to your account,” Coinbase’s supposed email to customers read.

Coinbase’s customer notice reportedly also clarified that unless it receives “a motion to quash or other legal filing” by January 15, 2025, it will be obliged to provide the requested information. This latest legal maneuver follows increased scrutiny of Polymarket, a decentralized prediction market platform that has previously faced regulatory action.

It is worth noting that Polymarket has been inaccessible to US residents since 2022. This followed a $1.4 million settlement with the CFTC for operating an unregistered derivatives trading platform. Despite this restriction, reports indicate that some US users circumvent the geo-block using virtual private networks (VPNs).

The CFTC’s subpoena of Coinbase raises concerns about potential implications for its users. The exchange stated that users do not need to take immediate action, but the possibility of sharing user data with the CFTC could unsettle its customer base. The CFTC has not clarified what specific information it is seeking or how it plans to use the data in its broader investigation.

As of this publication, Polymarket has not provided a public comment on the subpoena. Similarly, Coinbase did not immediately respond to BeInCrypto’s request for comment. Nevertheless, the situation reflects the growing intersection between cryptocurrency platforms and regulatory oversight.  

Meanwhile, the subpoena comes amid escalating legal challenges for Polymarket. In mid-November, the Federal Bureau of Investigation (FBI) raided the home of Polymarket CEO Shayne Coplan. The agency seized Coplan’s phone and other electronic devices. The raid occurred just days after Donald Trump’s victory in the November 2024 US presidential election.

In hindsight, the election had been a significant driver for Polymarket. As BeInCrypto reported, the platform’s betting volume surpassed $3 billion during the election cycle. Some users netted up to $50 million in profits from correctly predicting Trump’s win.

The boom in Polymarket’s activity also raised concerns about the potential for manipulation in decentralized prediction markets. Following the US election, global regulators, including France’s Autorité nationale des jeux, reportedly launched investigations into Polymarket’s operations and compliance with local gambling laws.

These concerns add to the regulatory scrutiny Polymarket has faced since its inception, even as the platform’s appeal continues to grow internationally.