Written by: Pzai, Foresight News
Yesterday, Polymarket CEO Shayne Coplan was investigated by the FBI and his cell phone and other electronic devices were confiscated. He did not disclose the reason for the raid, but sources suspected it was political retaliation because Polymarket accurately predicted that Trump would easily defeat Vice President Kamala Harris, contrary to traditional polls.
When Coplan made the complaint against the current government, Musk also echoed his agreement on Twitter. Coplan's reply of an "eagle symbol" brought new hype opportunities to the market, and the meme of the same name became popular, with a market value of up to 40 million US dollars.
Since Trump took office, expectations for regulation in the crypto space have been significantly relaxed, but with only a few months left, the Biden administration seems to want to strangle crypto regulation by the throat for the last time within its sight.
Polymarket shines
In the report, the sources also speculated that the administration might use reports from liberal media outlets to accuse Polymarket of manipulating the market and rigging the polls in favor of Trump.
For the real situation, we can compare the gap between poll predictions and actual results. Galaxy Digital counted the predictions of the election market a few days before the vote count, and the final result calculated by electoral votes was 58% to 42%. Overall, the prediction market predicts that Trump's winning rate is higher than 55%, which is much closer to the actual situation than the average poll prediction of about 50%. As a polling media, the centralized results themselves have ideological preferences, and the gap between the two just proves this point.
Left: Market forecasts for the US election on November 5 Source: Galaxy Digital Right: Actual results of the US election in 2024
In this fully-competitive market, some people have also made a lot of money. For example, French trader Théo once bet heavily on the crypto prediction market Polymarket that Trump would win a second term. According to the platform's data, he earned $85 million from this bet. The overall market trading volume of Polymarket has also reached $3.5 billion. But its operations in the United States have not been smooth sailing. In 2022, Polymarket was forced to suspend trading in the United States and pay a fine of $1.4 million to settle with the U.S. Commodity Futures Trading Commission (CFTC) for its failure to register with the agency.
In any case, Polymarket itself said, "We have proved that prediction markets are smarter than polls, the media, and experts."
The present and future of struggle
As one of the byproducts of political struggles, the donkey-elephant dispute in the United States has naturally spread to the crypto field. The two distinct factions are the pro-crypto Republicans led by Musk and Trump, and the other is the "strict crypto regulation" camp represented by the U.S. Securities and Exchange Commission (SEC). They tell the crypto field their attitude through various lawsuits and fines, but the SEC is not always popular.
After the SEC v. ConsenSys and Ripple case, an appeals court ruled that the SEC's rejection of Grayscale's spot Bitcoin ETF application was "arbitrary and capricious." After dropping the charges against Ripple's co-founder, the SEC has also come under close public scrutiny. In a previous interview with Foresight News, crypto-friendly SEC Commissioner Hester M. Peirce also said: "Good regulation enables innovators to build under clear rules instead of constantly trying to understand the rules they are following." (Extended reading: Dialogue with the US SEC "Crypto Mom": Behind the 10-year fine of 3 billion is the lack of progress in US regulation)
Under the Biden administration, Gary Gensler has filed Wells notices (notices before formal charges) against companies including the crypto gaming project Immutable, the NFT platform OpenSea, and the stock and crypto trading platform Robinhood. In the remaining months, Gensler does not have enough time to file any new lawsuits or formulate regulations, and subsequent SEC chairmen can choose to revoke these decisions.
In the next four years after the election results are settled, under the banner of the Trump administration to greatly enhance the status of Bitcoin and "ensure the status of encryption in the United States", the pro-crypto SEC chairman appointed by the president is more likely to adopt a free-range model, legislate on the core functions of the crypto market and thereby increase the transparency of crypto industry regulation, while increasing the degree of relaxation of the crypto market and allowing the appropriate development of ecological projects and their use cases.
