Federal prosecutors in New York have dropped an investigation into Polymarket, the popular crypto-powered gambling website where users place bets on elections, a person familiar with the matter said.
In the waning days of the Biden administration, the Federal Bureau of Investigation carried out a search at the New York City home of Polymarket’s chief executive, Shayne Coplan, as part of an inquiry into whether the site allowed U.S. users to place bets. A previous settlement with federal investigators banned Polymarket from offering its services to U.S. customers.
Polymarket received a letter this month from the U.S. attorney’s office for the Southern District of New York, saying the unit’s investigation had been closed, said the person familiar with the inquiry, who was not authorized to speak publicly. The Commodity Futures Trading Commission, a regulatory agency in Washington, sent a separate letter to Polymarket this month saying it, too, had closed an investigation, the person said.
A Polymarket spokesman declined to comment. Representatives for the Commodity Futures Trading Commission and the Southern District prosecutors declined to comment. Bloomberg reported earlier that the investigations had been closed.
The investigations were closed amid a broader pullback by the federal government from the Biden administration’s crackdown on the cryptocurrency industry. Federal regulators have dropped lawsuits against some of the largest crypto firms, and Congress is considering several pro-crypto bills in the coming days — a series of votes called “crypto week” by industry supporters.
Polymarket became an internet betting phenomenon during last year’s presidential campaign. The election odds there were cited by the Republican nominee, Donald J. Trump; Elon Musk; and news organizations like CNN.
Gamblers on Polymarket wagered more than $100 million on the presidential race. While polls showed a close election, the site’s odds gave Mr. Trump a large advantage over Vice President Kamala Harris, the Democratic nominee.
In November, F.B.I. agents conducted “court-authorized law enforcement activity” at Mr. Coplan’s address, according to a law enforcement official.
In a post on X at the time, Mr. Coplan said the Biden administration was making “a last-ditch effort to go after companies they deem to be associated with political opponents.”
Election betting is a murky legal area in the United States. In 2022, Polymarket agreed to stop offering its services to U.S. users after settling with the Commodity Futures Trading Commission for operating without registration. The company paid a $1.4 million fine.
David Yaffe-Bellany writes about the crypto industry from New York. He can be reached at [email protected].
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