Regulators are investigating Polymarket’s adherence to French gambling laws, with potential actions including blocking access to the platform in France.
Polymarket, a blockchain-powered prediction platform, faces scrutiny in France after generating $3.5 billion in trading volume during the recent US presidential election. Reports suggest France’s National Gaming Authority (ANJ) may consider banning the platform over possible breaches of local gambling laws.
According to French news source The Big Whale, regulators are investigating Polymarket’s operations and adherence to French gambling regulations. This inquiry intensified after a high-stakes trader, Theo, wagered millions on Donald Trump’s re-election. Theo’s bold moves led to a $47 million payout when Trump won.
Two weeks before election day, Reuters spotlighted Theo’s hefty wagers, sparking initial fears of possible market interference. Later, Theo revealed his identity to the Wall Street Journal, disclosing over $30 million in election bets and framing his actions as expressions of personal political beliefs.
Regulatory Scrutiny Looms as Trading Volume Soars
The ANJ, France’s regulatory body, may soon block access to Polymarket, restricting its domain names and potentially pressuring media to avoid linking to it. Such measures could limit Polymarket’s presence in France. However, users can still reach the platform through VPNs since Polymarket operates solely with crypto wallets, sidestepping conventional identity checks.
No timeline for the potential ban has been released, yet Polymarket is no stranger to regulatory scrutiny. Worldwide, it has encountered oversight, including an ongoing probe by the US Commodity Futures Trading Commission (CFTC) since 2021. Recently, the CFTC proposed new rules for prediction markets to curb risks like market manipulation.
Amid regulatory hurdles, prediction platforms like Polymarket still draw major investment and high user activity. Polymarket raised $74 million from early investors, including Ethereum co-founder Vitalik Buterin, though US users remain restricted. On November 5 alone, Polymarket handled over $294 million in trading volume as users wagered on election outcomes.
The Future of Blockchain-Based Prediction Markets
Polymarket sets itself apart from traditional betting platforms by using blockchain technology. Users can place cryptocurrency bets without middlemen, creating a more decentralized and transparent betting environment. Currently, Polymarket controls betting proposals; however, a token launch could decentralize the platform and change the current setup.
Despite doubts about its predictive abilities, Polymarket has proven it can accurately forecast major political events. For instance, the platform predicted various election outcomes before they happened. However, Polymarket’s future in France is uncertain. The ANJ’s investigation will determine if the platform can continue operating under French regulations.
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