Cryptocurrency-based prediction platform Polymarket is intensifying its efforts to block US-based users as it witnesses a massive wave of predictions in favor of Donald Trump in the upcoming presidential elections.
The platform, which bars US residents from trading, is performing additional checks to ensure big spenders are outside the country, according to people familiar with the matter.
Polymarket is re-verifying user information, particularly for large-scale predictions, to ensure compliance with its rules as scrutiny of its political markets grows, a source said. The crackdown comes amid high speculation about Trump returning to the White House. One investor, known by the username “Fredi9999,” made more than $18 million in predictions on Republican results and invested about $13 million in the platform’s main presidential market, making him the largest trader on the site.
Blockchain analysts on social media platforms, including X-users “FozzyDiablo” and “Domahhhh,” and Arkham Intelligence’s research suggested that “Fredi9999” and three other Polymarket accounts, collectively estimated to have over $43 million, may be controlled by the same person. The accounts are reportedly located outside the US.
Polymarket’s presidential election marketplace has attracted a lot of attention, with more than $2.2 billion in trading volume for the 2024 race. Recent heavy predictions on Trump have put the implied probability of his victory at 64% on Polymarket as of Tuesday, compared with 59% on PredictIt and 60% on Kalshi, two other prediction platforms. Even so, polls show Trump trailing Democratic opponent Vice President Kamala Harris, with Harris leading by a narrow margin, 49.3% to 48.5%, according to RealClearPolitics.
As interest in the U.S. election grows, Polymarket has seen a surge in new investors, including many from the U.S. who have bypassed the platform’s geo-restrictions using virtual private networks (VPNs). Social media has been awash with tutorials on how to bypass Polymarket’s restrictions, Bloomberg reported earlier this year.
Polymarket allows users to buy “yes” or “no” stocks on various outcomes, with the volume of those trades determining the implied probability of each event. Despite Polymarket’s ban on U.S. users, it remains a popular place for election predictions.
In early 2022, Polymarket was fined by the Commodity Futures Trading Commission (CFTC) for offering illegal trading services.
As part of the settlement, the platform agreed to cease operations in the US but continue to operate internationally. Meanwhile, rival platform Kalshi recently won a legal victory in the US election that allowed it to offer local derivatives contracts, further increasing competition in the space.
*This is not investment advice.