Coinbase Issues User Notification Amid CFTC Subpoena for Polymarket

• The US CFTC filing shows that Coinbase needs to comply by January 15 unless a legal filing prevents it.
• Polymarket has faced investigations from global regulators, including France’s gambling authority, and has been geo-blocking U.S. users since 2022.

Crypto exchange Coinbase recently received a subpoena from the Commodity and Futures Trading Commission (CFTC) in regard to the ongoing lawsuit with the crypto-based decentralized prediction market Polymarket. The crypto exchange disclosed the news regarding the subpoena in a notice to customers on Wednesday, January 8.

EthHub co-founder Eric Conner shared the details of the notice in a post on the X platform. The notice read:

We write to inform you that Coinbase has been served with a subpoena in the above-referenced matter seeking general customer information that includes information related to your account.

However, the posting showed that there was no specific action required from users; however, it was necessary for the exchange to send certain information regarding user accounts to the US CFTC, as per the subpoena. The filing notes that Coinbase should meet the requirement by the deadline of January 15 unless the exchange is “formally served with a motion to quash or other legal filing preventing the sharing of this information.”

Coinbase has been embroiled in legal tussles, especially with its ongoing case with the US SEC, reported CNF. Recently, the exchange secured another major victory after Judge Catherine Polk Failla granted Coinbase’s request for an interlocutory appeal. Speaking on the development, company CLO Paul Grewal stated:

Over the strenuous objection of US SEC, Judge Failla has GRANTED our motion for leave to pursue an interlocutory appeal and STAYED the district court litigation. We appreciate the Court’s careful consideration. On to the Second Circuit we go.

Why Is Us CFTC Targeting Polymarket Via Coinbase?

The reported CFTC subpoena to Coinbase comes amid increasing uncertainty surrounding Polymarket following a mid-November raid by the U.S. Federal Bureau of Investigation (FBI) on the home of Polymarket CEO Shayne Coplan.

The raids occurred just a week after Republican Donald Trump secured the U.S. presidential election on November 5, 2024. Cryptocurrency investors profited significantly from betting on Trump’s victory on Polymarket, with some winning as much as $50 million.

Some industry experts also raised concerns regarding the potential manipulation of Polymarket’s decentralized prediction market. On November 7, 2024, global regulators, including France’s Autorité nationale des jeux, reportedly investigated Polymarket’s operations and compliance with local gambling law.

Despite being headquartered in the United States, the decentralized prediction platform has been inaccessible to US residents since 2022. This is due to the $1.4 million settlement with the US CFTC after the regulator accused the firm of running an unregistered derivatives trading platform.

While Polymarket reportedly blocks US users from placing bets on the platform, media reports indicate that many users in the US have circumvented the restriction by using VPNs.