Polymarket, a blockchain-based prediction platform, may face a banishment from France’s National Gaming Authority, following its monumental $3.5 billion trade during the US presidential election. The authority is closely investigating Polymarket’s operation and examining its adherence to French gambling legislation, according to a report by local media outlet, The Big Whale.
The increased regulatory scrutiny arose after Theo, a French trader, placed sizable bets on Donald Trump’s victory and amassed a staggering $47 million payout. The controversy commenced subsequent to Theo being identified by Reuters two weeks prior to the election day. The potential ban, according to the report, could encompass the restriction of access, blocking domain names, or applying pressure on media outlets that link to Polymarket.
Polymarket, following allegations, admitted to having communicated with Theo citing his vast trading experience and financial services background. The platform expressed that it executed an investigation, which deduced that the trader was betting based on their “personal views” on politics.
Further fueling the concerns, the colossal bets were initially deemed manipulative until Theo revealed his identity to the Wall Street Journal, validating that they made over $30 million in bets concerning the U.S. elections.
While these regulatory hurdles mount, Polymarket is nestled in a broader global pressure cooker. The U.S. Commodity Futures Trading Commission began probing the platform as early as 2021 and subsequently proposed rules aimed at countering manipulation risks in prediction markets. Despite significant regulatory scrutiny, Polymarket maintains a robust attraction, securing over $74 million from early investors, including Ethereum co-founder Vitalik Buterin. However, the platform remains inaccessible to US users.