Coinbase Inc. (COIN) is warning customers that U.S. regulators are requesting information about its interactions with prediction market firm Polymarket, according to people familiar with the matter. The company says it is sending a message to customers saying they may need to share that data.
Copies of the email shared with some customers have been circulating on social media sites, and the warnings about the U.S. Commodity Futures Trading Commission's (CFTC) request are accurate, the people said. The U.S. derivatives regulator has been engaged in a long legal battle with prediction market companies, and the latest move comes just days before the agency's leadership changes from Democratic to Republican with the inauguration of President-elect Donald Trump. I was disappointed.
“When we receive requests for information from the government, each request is carefully reviewed using established procedures by a team of trained professionals and is subject to legal compliance,” a Coinbase spokesperson said in an emailed statement. The company declined to confirm receipt of the information. Certain subpoenas. “If necessary, we will try to narrow down requests that are too broad or ambiguous in order to provide a more tailored response. In some cases, we may also object to providing any information. .”
The CFTC lost its first case against prediction market company Calci late last year when a U.S. federal judge ruled that the company could not be barred from posting election contracts. But regulators quickly appealed to a higher court, and Polymarket argued in its new legal conflict that only Congress can halt election gambling.
Read more: US election gambling: Federal court 'erred' to allow Kalsi to launch prediction market, CFTC says
Neither the CFTC nor Polymarket immediately responded to requests for comment about their efforts to collect customer information.
On January 20, President Trump will be able to retake the White House and appoint a new commissioner to replace Rostin Behnum, who has led the CFTC in a long legal battle with forecasting companies. Incumbent Republican commissioners Caroline Pham and Summer Mersinger are being watched as potential candidates for the open chair position, as is former commissioner Brian Quintentz.
