Coinbase Subpoenaed by CFTC for Customer Data Linked to Polymarket

Coinbase is under investigation by the Commodity Futures Trading Commission (CFTC), which has issued a subpoena for customer data related to Polymarket, a prediction platform built on blockchain technology.

This move has raised questions within the crypto community as it marks a significant step in the CFTC’s examination of prediction markets ahead of the U.S. elections.

Polymarket, which allows users to wager on outcomes of various events, including political predictions, has been under regulatory scrutiny since its inception. The subpoena, which was made public recently, specifically requests customer information tied to the platform. A screenshot of an email from Coinbase to some of its users was shared by Eric Conner, founder of ETHHub, revealing that the exchange may be required to submit data to the CFTC.

This is not the first time Polymarket has faced regulatory challenges. In 2022, the platform was hit with a lawsuit from the CFTC for failing to register its services, resulting in a hefty fine and restrictions on access for U.S. citizens.

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The platform’s prominence grew during the 2020 election cycle, especially with its political market focused on predictions surrounding Donald Trump’s re-election campaign. Following his victory, Polymarket faced heightened scrutiny, culminating in an FBI raid on the company’s CEO Shayne Coplan’s New York apartment. At the time, the platform described the raid as politically motivated, and reports later suggested a broader Justice Department investigation was underway.

In light of the subpoena, Coinbase has reiterated its commitment to user privacy but made it clear that it will comply with lawful requests from the government. The exchange’s spokesperson emphasized that any such requests are reviewed thoroughly by a legal team to ensure they are valid. In cases where the request is deemed insufficient, Coinbase will challenge it, but in other instances, it may be legally obligated to provide the requested information.

Alexander Stefanov