Written by: Azuma, Odaily Planet Daily
When the FBI comes knocking
The New York Post reported today that people familiar with the matter revealed that Polymarket founder Shayne Coplan's home in SoHo, New York, was raided by the Federal Bureau of Investigation (FBI) - around 6:00 a.m. local time, Coplan was awakened at home, and FBI law enforcement officers asked him to hand over his mobile phone and electronic devices, but did not arrest Coplan.
Bloomberg later followed up with a report saying that the surprise inspection was caused by the U.S. Department of Justice (DOJ) investigating Polymarket, accusing the platform of violating the "blocking U.S. user access" agreement reached with the Commodity Futures Trading Commission (CFTC) in 2022 and continuing to accept transactions from U.S. users.
After the incident, Coplan himself posted two updates on X. The first update was a joke about getting a new phone... The second was a positive response, saying: "It is frustrating that the current administration will take a last-ditch effort to hunt down companies they believe are associated with political opponents. We are firmly committed to nonpartisanship, and today is no exception, but the current administration should do some self-reflection and realize that taking a more business-friendly and entrepreneurial approach could change their fate in this election. Polymarket has provided value to tens of millions of people in this election cycle without hurting anyone. We are very proud of this. I can say with my head held high that the future of the United States, especially the future of American entrepreneurship, has never been so bright. In the face of adversity, we will continue to build."
The US Election and the Rise of Polymarket
Polymarket is arguably the most popular application in the cryptocurrency industry in this cycle - and it can even be said to be the only one.
With a series of prediction markets built around the US election, Polymarket has achieved rapid growth in 2024. Around April this year, the platform's monthly trading volume was only about 40 million US dollars, and by October it had soared to 2.5 billion US dollars. During the election, Polymarket ushered in an explosion of traffic, and the cumulative trading volume for the 2024 US presidential election alone exceeded 3.6 billion US dollars.
In addition, Polymarket has also subverted traditional media in terms of source value - when mainstream media such as CNN successively stated that Harris was leading in the polls, Polymarket's probability of Trump winning was always in the leading position.
After Trump finally won the election, Polymarket also announced its victory on its official X account: "Polymarket has proven that prediction markets are smarter than polls, the media, and experts. Polymarket has consistently and accurately predicted the results, far ahead of all three, demonstrating the power of high-volume, high-liquidity prediction markets like those pioneered by Polymarket..."
The "crime" points to allowing American users to access, but is this really the case?
According to media reports, the US Department of Justice's accusation against Polymarket is that the platform continues to accept transactions from US users, which violates the agreement reached between Polymarket and the CFTC in 2021.
In January 2022, the CFTC reached a settlement with Polymarket for "providing event-based binary options products", and Polymarket agreed to pay a $1.4 million civil penalty because the company operated in the United States without registration. As part of the settlement agreement, Polymarket promised to gradually stop services in the United States while continuing to operate abroad.
However, although US users have not technically been allowed to place bets on Polymarket since then, the platform still has a large number of users from the US - Forbes reported in August that Similarweb data showed that 25% of traffic on the Polymarket website still comes from the US.
In fact, the CFTC has been opposed to whether platforms like Polymarket can provide election-related prediction market methods. In addition to Polymarket, two other well-known prediction platforms in the non-cryptocurrency industry, PredictIt and Kalshi, also have disputes with the CFTC on this issue.
However, the industry generally does not believe that the U.S. Department of Justice's investigation into Polymarket is really related to this matter. Just as Coplan emphasized that this matter may be politically motivated, the New York Post also quoted a source in the original report: "The current government is likely trying to accuse Polymarket of manipulating the market and manipulating polls to support Trump."
Community Response
After this morning's investigation, various sectors of the community have expressed their support for Coplan after the incident was exposed.
Elon Musk directly replied to Coplan’s second post: “Indeed”; Coinbase CEO Brian Armstrong criticized the investigation more directly, believing that the Justice Department’s actions were entirely politically motivated, but this would only strengthen Polymarket’s influence in turn.
In addition, the meme community also responded quickly to this incident. The market value of the meme token FREE Shayne Coplan (the token symbol is an "eagle") with the theme of "Free Coplan" once reached 30 million US dollars.
But the problem is that Coplan was not arrested, only his phone was confiscated, and he is still FREE... (Maybe this is part of the meme)
Dear meme warriors who are ready to charge, please be sure to do your research and pay attention to risk control before taking action.
