As an analyst, I find myself under the microscope of the Commodity Futures Trading Commission (CFTC), due to Coinbase’s association with Polymarket, a cryptocurrency-centric prediction market platform. This increased scrutiny stems from our shared activities.
8th January, 2025 saw our customers notified that we’d been served with a subpoena by the Commodity Futures Trading Commission (CFTC). They are currently investigating the workings of our platform.
CFTC Issues Final Crypto Blow
Based on a post by EthHub co-founder Eric Conner, the subpoena requests general customer information linked to their dealings with Polymarket. Coinbase, in an email, explained that users don’t need to take any immediate action, but they might be required to disclose specific account details unless a legal motion is filed before January 15, 2025, to prevent this request from being fulfilled.
This move occurs during a tightening of regulations against decentralized wagering sites, as the Commodity Futures Trading Commission (CFTC) is contemplating Polymarket’s activities to be akin to gambling, sparking debate over compliance with regulatory standards.
These recent advancements occur after a stormy phase for Polymarket, during which:
1. The FBI conducted a raid on the Manhattan apartment of Polymarket CEO Shayne Coplan on November 13. This action followed the platform’s correct prediction about Donald Trump’s election win.
2. Rumors circulated that the raid was politically motivated, with Coplan himself labeling it as a “desperate” attempt to focus on political adversaries.
3. Polymarket, who had previously faced fines from the CFTC, is also under regulatory investigation for suspected market manipulation.
Even though Polymarket restricted access for U.S. users after their agreement with the CFTC in 2022, some individuals are said to have circumvented these limitations by utilizing Virtual Private Networks (VPNs). This workaround has sparked renewed worries about the possibility of market manipulation and illegal gambling.
Currently, a new subpoena issued to Coinbase represents a crucial phase in the ongoing debate between the U.S. government and the cryptocurrency market regarding regulation. Under President Biden’s administration, agencies like the CFTC have been working diligently to increase control over the crypto industry. However, this is anticipated to shift when Trump returns to office.
Trump’s Bold Crypto Gambit
During his presidential campaign, Trump frequently expressed his firm backing for the cryptocurrency sector and promised to implement policies that would boost its usage if he won the election. Since taking office, he has been following through on these promises, for instance by placing pro-crypto individuals in key roles, with Paul Atkins being tapped as a potential successor to Gary Gensler as SEC chairman.
In addition, he designated David O. Sacks, a former COO of PayPal, as the head honcho for artificial intelligence (AI) and cryptocurrency, often referred to as the “czar.” At the same time, Elon Musk, CEO of Tesla, and entrepreneur Vivek Ramaswamy were assigned to oversee the new Department of Government Efficiency (D.O.G.E.).
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2025-01-09 21:30