Federal investigations into Polymarket closed with no charges filed

Polymarket, a cryptocurrency-based prediction market platform, is no longer under investigation by the U.S. Department of Justice and the Commodity Futures Trading Commission, a person familiar with the matter told CNBC. The two federal probes, one civil and one criminal, have been formally closed without any charges filed.

The company received declination notices from both agencies earlier this month, notifying them that the investigations had concluded and that no further action would be taken. The developments were first reported by Bloomberg.

The probes were initiated over concerns that Polymarket had continued allowing U.S. residents to place bets on political events, despite an earlier settlement in 2022 in which the company agreed to cease operations within the U.S. market. As part of that settlement, the CFTC fined the company $1.4 million for offering unregistered event-based binary options contracts.

The criminal investigation, led by the U.S. Attorney’s Office for the Southern District of New York, included a court-authorized raid last November at the New York City apartment of Polymarket CEO Shayne Coplan. At the time, agents seized electronic devices, including Coplan’s phone. No criminal charges were brought against him.

Coplan, in a post on social media platform X following the raid, attributed the investigation to political motivations. “It’s discouraging that the current administration would seek a last-ditch effort to go after companies they deem to be associated with political opponents,” he wrote in November.

By the end of last year, Polymarket had emerged as a prominent platform for betting on the U.S. presidential race, handling more than $100 million in wagers, according to an NBC analysis. The platform’s odds, which heavily favored Republican nominee Donald Trump over Democratic candidate Vice President Kamala Harris, were cited by Trump himself, as well as Elon Musk and major media outlets.

In March, Coplan publicly thanked Trump for including him in a White House crypto summit. “This admin’s commitment to collaboration with American innovators is revitalizing the American dream,” he posted on X. “The future is bright.”

Regulators have backed away from several enforcement actions initiated under the Biden administration, and Congress is considering a slate of bills aimed at fostering the growth of digital asset markets. Supporters of these initiatives have dubbed the upcoming votes “crypto week.”

While platforms like KalshiEx and Polymarket have drawn regulatory scrutiny, a recent federal court ruling allowed KalshiEx to offer election-based markets, and the CFTC later withdrew its appeal.