France’s National Gaming Authority (ANJ) reportedly plans to stop Polymarket, the blockchain-based prediction market platform that generated $3.5 billion in trading volume during the recent U.S. presidential election. French officials are examining Polymarket’s operations and evaluating its compliance with French gambling laws.
Polymarket Under Scrutiny Amid Betting Scandal
This is the second major trading scandal since Leonardo’s on French financial markets in a row and follows high-stakes bets by a trader, Théo, who wagered on multimillion-dollar wagers that former President Donald Trump would win reelection. The bloc said Théo won a $47 million payout, feeding regulatory concerns about potential manipulation risks on the platform. The French media has stressed that ANJ also has the authority to restrict access and even block domain names of non-compliant gambling platforms.
ANJ is looking at how the betting giant adhered to French regulations since its platform lets people use cryptocurrency and bet on it without doing the types of traditional identity verification that many other platforms accept. This has brought oversight and accountability into question. However, ANJ hasn’t indicated a timetable for any potential limitations, which could also pressure media outlets that point to Polymarket.
Polymarket Defends Trader’s Political Bet Motivation
Polymarket said Théo’s high-profile trades on the platform were motivated by personal political views, not attempts to manipulate. The platform added that the company had also conducted an internal review based on Théo’s background in financial services and extensive trading experience, finding his trades aligned with that. The aim was to clarify things because large bets typically bring concerns regarding how they might be reflected in the market’s perception.
Polymarket claimed, however, that it has faced regulatory challenges across the continent. In 2021, the U.S. Commodity Futures Trading Commission (CFTC) started looking into Polymarket and examining market manipulation matters, even tipping at draft rules for prediction markets. Polymarket remains unavailable for American users but receives substantial volumes internationally.
VPNs Complicate Potential Ban on Polymarket
The betting platform runs on blockchain infrastructure, so users can place wagers without intermediaries or identity verification using cryptocurrency wallets. This model creates a convoluted problem for regulators, who have long used processes for oversight. Ensuring a total ban on the platform could prove difficult for French authorities since users can still access it via virtual private networks (VPNs).
But because the platform’s popularity is so tied to high-profile events—like the U.S. election—it gets millions of dollars in single-day trading volume. By the time voting began on November 5, Polymarket had processed more than $294 million in users’ speculation of election outcomes. This decentralized blockchain-based model shows traditional regulators’ difficulty in tackling similar platforms.
Regulatory Scrutiny Grows as Polymarket Expands
Although its predictive powers remain doubtful, the betting giant has correctly called events like Biden’s exit from the race. The platform remains valuable from the investor perspective; it has raised $74 million, including contributions from prominent folks such as Ethereum co-founder Vitalik Buterin. If the platform progresses to reportedly consider a possible token launch, the control could be handed over to token holders, making a move for more decentralization.
Polymarket is a recent secondary market, watched closely by authorities worldwide as France considers new restrictions. ANJ’s investigation has been largely successful, signalling more comprehensive regulatory moves across Europe as more blockchain-based betting platforms emerge. Regulators worldwide are weighing the market impact on gambling legislation and integrity as Polymarket users wait for the following announcements.
Stay tuned to TheBITJournal and keep an eye on Crypto’s updates. Follow us on Twitter and LinkedIn, and join our Telegram channel to be instantly informed about breaking news!