How did a cryptocurrency betting platform become the subject of global controversy, attracting criticism from Singapore, the FBI and angry users?
Growing problems in Polymarket
singapore It shines as a leading center for technology and innovation. However, when it comes to gambling, the city-state takes a remarkably conservative approach.
This dichotomy has come to light recently a light On January 12, when Polymarketa well-known cryptocurrency-based prediction market, has run afoul of Singapore's strict gambling laws.
Polymarket offers a platform where users can use cryptocurrencies, especially USDC (US dollars) to bet on real-world events, from election results to cryptocurrency price fluctuations. While some consider it a form of speculative pleasure, the Singaporean authorities have officially classified it as a gambling site.
When Singaporeans attempted to access Polymarket, they faced a severe warning under Section 20 of the Gambling Control Act 2022. This law forms a key part of Singapore's strict regulatory framework, which explicitly prohibits gambling through unlicensed operators.
Those who violate this law may face severe penalties, including fines of up to S$10,000, six months imprisonment, or both. The only legal betting option in Singapore is through Singapore Pools, the country's officially authorized gambling operator.
Alex Zuo, vice president at Cobo Global, a digital asset custody services provider, highlighted the seriousness of the situation in a social media post.
“Polymarket is officially defined as a gambling website in Singapore. If you want to bet, you can only go to a state-owned gambling company. Otherwise, you will face fines and imprisonment.”
This isn't the first time Polymarket has found itself under the microscope. Why is there such a surge in interest, and why is the platform being in the spotlight for all the wrong reasons? Let's delve deeper into the unfolding story and its implications.
Betting on tragedy raises anger
As Los Angeles battles one of its most devastating wildfire seasons, the unfolding disaster serves as a grim backdrop to Polymarket's latest controversy.
The Palisades wildfires, the most destructive fires in Los Angeles history, have burned more than 23,000 acres, destroyed thousands of homes, and claimed at least 24 lives.
The devastation has left Angelenos grappling with existential questions. But for Polymarket, these deeply personal concerns turned into a gamble Opportunitiesoffering markets such as “When will the Palisades wildfires be completely contained?” and “How many acres will the Palisades wildfire burn?”
This led to a wave of public outrage, with many accusing Polymarket of profiting from human suffering.
One angry user said: “I don't understand how people can support Polymarket in wildfire betting markets. It's so terrible to make this tragedy a way to make money.”
Another angrily added: “Prediction markets directly incentivize anti-social behaviour. You are creating a public and liquid price mechanism to reward terrorism.”
Concerns have also been raised about the potential for these markets to encourage harmful acts, such as arson. As one user noted, “This motivates people to commit acts of arson. “I don’t see a counterargument.”
And Polymarket, far from shying away from controversy, seemed to double in size. A tweet from their official X account attempted to bring politics into the discourse, referring to Los Angeles Mayor Karen Bass and her absence during the crisis.
However, not everyone sees Polymarket's wildfire competitions in the same light. Some within the cryptocurrency community have defended the platform, comparing it to insurance companies, which also profit from disasters.
“Is it really different?” One supporter responded, noting that insurance payouts, like prediction markets, are ultimately about crisis-related financial incentives.
The user also argued that most bets were structured to reward outcomes such as containment rather than destruction, saying: “The payouts overwhelmingly favor stopping fires rather than spreading them.”
However, this defense did little to sway public opinion. The broader consensus remains that Polymarket crossed an ethical line by creating and advertising these bushfire-related competitions, especially during an ongoing tragedy that has claimed many lives and displaced tens of thousands.
FBI and CFTC Tag Team Audit
Aside from the recent public uproar, Polymarket's journey has not been smooth at all. Since its founding in 2020, the platform has constantly tested the boundaries of what is legally permissible in the prediction market space.
The story took a sharp turn when Coinbase, one of the world's largest cryptocurrency exchanges, revealed that it had received a subpoena from the Commodity Futures Trading Commission.
The subpoena, which was issued directly to Polymarket and shared on social media on January 9, requires general customer information related to the platform's activities.
While Coinbase assured its users that no immediate action was needed on their part, it also clarified that it may have to comply with the CFTC order unless legal intervention occurs before January 15.
For those following Polymarket's journey, this isn't entirely unexpected. The platform was already there Face it $1.4 million settlement with the CFTC in 2022 for operating an unregistered facility offering event-based binary options.
A reported CFTC subpoena comes to Coinbase the next The mid-November FBI raid on the home of Polymarket CEO Shane Coplan.
On the morning of November 13, 2024, federal agents stormed the Manhattan residence of Polymarket CEO Shane Coplan, in what many described as a highly charged operation.
According to reports, Coplan, 26, was awakened at 6 a.m. when FBI agents executed a search warrant, demanding access to his phone and other electronic devices.
The raid occurred less than a week after Donald Trump won the US presidential election, an outcome that Polmarket controversially predicted with strong odds in Trump's favor, even when most traditional polls showed a close race.
Coplan himself did not hold back, and took to X to accuse the outgoing Biden administration of launching a politically motivated attack. As he put it, it was a “last-ditch effort” to target companies seen as aligned with political opponents.
Even Elon Musk now ready To co-lead the Department of Government Efficiency under the incoming Trump administration, he shared, “This seems flawed.”
The connection between the FBI raid and the subsequent CFTC subpoena targeting Coinbase reveals a coordinated regulatory effort to audit Polymarket's operations.
From peak to trough and the road ahead
Polymarket's journey has been a story of explosive growth, relentless controversy, and an unwavering grip on the cryptocurrency prediction market.
What started as a nascent prediction market with monthly revenue of a few million dollars by mid-2024 quickly turned into a force fueled by US election madness.
According to Dune Analytics, in June 2024, the platform generated $111 million in monthly trading volume. By July, that number had more than tripled to $387 million.
As election season reached its peak, so did Bullemarket. In October, volumes rose to a staggering $2.5 billion, a five-fold increase from the $500 million in September. November broke all previous records, with the platform recording a trading volume of $2.62 billion – the highest in its history.
Furthermore, Polymarket's cumulative trading volume rose to over $4 billion in 2024, earning it mentions on Bloomberg, CNN, and CNBC — a rare feat for a cryptocurrency-based platform.
However, the end of the election season brought a reality check. Trading volumes declined significantly, with December seeing $1.92 billion – a notable decline from the November high.
The downward trend continued in January, with volumes barely exceeding $500 million midway through the month. At this pace, Polymarket could end January at around $1 billion, which would represent a 50% decline from December.
While these numbers are still strong compared to the pre-election days, they highlight the platform's reliance on major events to sustain its explosive growth.
For now, Polymarket remains under intense public and government scrutiny, with many questioning how far the platform is willing to push the boundaries of its controversial model.
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