Shayne Coplan is the subject of a criminal investigation as to whether he ran the site as an unlicensed commodities exchange.
A raid, for show: Polymarket founder and CEO Shayne Coplan, 26, had his Soho apartment raided yesterday morning by the feds.
For the uninitiated, Polymarket is a betting website that accurately predicted the outcome of the presidential election, contra many pollsters. Now, Coplan is the subject of a joint criminal investigation by the FBI and the U.S. Attorney’s Office for the Southern District of New York as to whether he ran the site as an unlicensed commodities exchange.
The feds seized Coplan’s devices, which has led to truly excellent tweets. Hey, if they’re gonna do all this in public, so should he.
But many speculate that Polymarket is getting in trouble not because it did something terribly wrong—indeed, nobody was harmed or defrauded, bettors are all willing adults, who in some cases made out like bandits—but because it disrupts the old way of doing things and embarrasses those in power. “Financial markets are generally pretty efficient, and the evidence suggests that the same is true of prediction markets”, Eric Zitzewitz, economics professor at Dartmouth, told CNN. “There’s no virtue-signaling in an anonymous market when you’re betting.”
Polymarket works by allowing users to buy shares tied to a specific outcome. Each share then trades somewhere between $0 and $1; correct bets pay out a dollar, so you can earn a fair chunk of change (as one French trader did, betting that Donald Trump would win the election). It’s all run peer-to-peer on the blockchain, so there’s no bookie.
“Election betting is a murky legal area in the United States. In 2022, Polymarket agreed to stop offering its services to U.S.-based users after settling with the Commodity Futures Trading Commission for operating without registration. The company paid a $1.4 million fine”, reports The New York Times. But since then, the fact that you can access Polymarket easily with a VPN is an open secret; there are tons of U.
