CFTC Subpoenas Coinbase in Polymarket Case under Biden

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  • CFTC asks that Coinbase reveal customer data connected to Polymarket.
  • Subpoena provokes uproar as regulatory tensions rise ahead of Trump’s inauguration.

Due to an ongoing examination of the decentralized prediction platform, Polymarket, the U.S. Commodity Futures Trading Commission (CFTC) has served a subpoena on Coinbase. This action generated news headlines and reignited discussions about potential overreach in crypto sector regulations regarding free speech, as well as the information requested about customers.

Eric, one of the creators of EIP-1559, has disclosed that Coinbase recently sent an email to its users about a subpoena they received. Coinbase made it clear that no action is required from their customers and underscored their commitment to sharing account information with the Commodity Futures Trading Commission (CFTC). They cautioned that non-compliance could lead to a formal shutdown of operations on January 15, 2025.

Since late 2024, investigations by the U.S. Department of Justice have led to a new development regarding Polymarket. They allege that Polymarket enabled U.S. residents to place illegal wagers. The ordeal for Polymarket escalated when the FBI searched the CEO’s premises and confiscated some electronic equipment. This action followed allegations that Polymarket had foretold Donald Trump’s election victory, a prediction that raised concerns about freedom of speech.

Coinbase CEO Reacts Cautiously

Coinbase CEO Brian Armstrong, who has been vocal about regulatory overreach, criticized the FBI’s raid on Polymarket’s leader. He initially stated that such an action would only bolster Polymarket, but later deleted his tweet and replaced it with a more cautious comment: “I have removed my previous tweet until all facts are clear, but this situation doesn’t seem favorable.

Armstrong has remained silent regarding the CFTC subpoena. Neither the exact date nor the timing, which occurred only days before Donald Trump’s inauguration on January 20, 2025, have been disclosed. This close timing fueled speculation about the reasons behind it. Given his pro-crypto views, from criticizing government Bitcoin seizures to advocating for crypto integration into national policy, this subpoena could significantly impact regulatory dynamics under President Trump’s administration.

The CFTC’s move indicates that cryptocurrency platforms are under intense examination, and it remains unclear how this might impact Coinbase. Previously, industry leaders like Elon Musk and Mark Zuckerberg have voiced criticism against such actions, stating they could potentially stifle free expression and technological advancement.

The consequences of the CFTC’s action against Coinbase could establish a blueprint for how regulatory bodies handle customer data and compliance in the cryptocurrency sector. The crypto industry is on edge as it anticipates the evolution of policies proposed by the Biden administration, which it might encounter when changes are enacted under the new Trump administration.

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2025-01-13 10:23