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The Commodity Futures Trading Commission (CFTC) has allegedly issued a subpoena to the U.S.-based cryptocurrency exchange Coinbase, seeking customer information related to the crypto-focused prediction market platform Polymarket.
According to a customer notice shared by EthHub co-founder Eric Conner on January 8, Coinbase informed users about the subpoena and its possible consequences.
The notice indicated that Coinbase must provide general customer information to the CFTC unless users file a legal motion to prevent the disclosure by January 15, 2025.
Coinbase Indicates It May Provide Requested Information to CFTC
Coinbase specified that no immediate action was necessary from users but noted it would share the requested information if the subpoena is not challenged.
“We write to inform you that Coinbase has been served with a subpoena in the above-referenced matter seeking general customer information that includes details related to your account,” the notice stated.
Biden’s CFTC is subpoenaing customer data from @coinbase in their case against @Polymarket pic.twitter.com/YlCdUPwHs7
— eric.eth (@econoar) January 8, 2025
The CFTC’s action comes amid increased scrutiny of Polymarket, particularly following the FBI’s raid on the residence of its CEO, Shayne Coplan, in mid-November 2024.
The investigation escalated after cryptocurrency traders reportedly profited millions by wagering on Donald Trump’s success in the November 5, 2024, U.S. presidential election through Polymarket.
Some users reportedly earned as much as $50 million from these wagers.
Concerns regarding potential manipulation of Polymarket’s decentralized prediction market have emerged, attracting the attention of regulators.
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France’s Autorité nationale des jeux initiated its own investigation into Polymarket’s adherence to gambling regulations shortly after Trump’s election victory.
Polymarket, based in New York, has been unavailable to U.S. residents since 2022 due to a $1.4 million settlement with the CFTC.
The settlement accused Polymarket of operating an unregistered derivatives trading platform.
However, reports suggest that some U.S. users have circumvented the geo-blocking measures using VPNs to place bets.
CFTC Cautions About Possible Manipulation in Prediction Markets
In September, the CFTC cautioned about the vulnerability of prediction markets to manipulation in its latest filing against Kalshi.
The agency cited instances of recent manipulative activities on rival platforms, implying that Kalshi’s markets might encounter similar challenges.
One instance involved traders on Polymarket attempting to manipulate contracts related to Vice President Kamala Harris’ potential victory in the 2024 U.S. presidential election.
Additionally, a fabricated poll on PredictIt, showing musician Kid Rock leading Senator Debbie Stabenow in a senate race, significantly influenced the pricing of contracts for Stabenow’s reelection.
Kalshi, which allows users to bet on election outcomes, had previously faced legal challenges from the CFTC.
Last year, major financial data and information service provider Bloomberg LP announced its intention to integrate election odds data from the crypto betting platform Polymarket into its widely utilized Terminal.
The post Coinbase Reportedly Subpoenaed by CFTC for Customer Data in Polymarket Investigation appeared first on Cryptonews.
