Polymarket's Probe Highlights Challenges of Blocking U.S. Users (and Their VPNs)
Polymarket faces scrutiny over compliance issues in the crypto industry, particularly regarding U.S. residents using VPNs to bypass geographical restrictions. Federal law enforcement raided founder Shayne Coplan's home amid a DOJ investigation into potential violations of a 2022 regulatory settlement that prohibits U.S. access. Polymarket, a prediction market founded in 2020, has seen significant trading volume, especially around the U.S. presidential election. Despite blocking U.S. IP addresses, American users have circumvented these measures. Experts suggest implementing know-your-customer (KYC) processes and monitoring for VPN use as potential solutions. Polymarket's previous regulatory violations may subject it to stricter compliance standards. The CFTC's 2022 order did not clarify compliance requirements, leaving ambiguity in how to effectively geofence U.S. users.
