FBI Seizes Polymarket CEO's Electronics

The Federal Bureau of Investigation seized Polymarket CEO Shayne Coplan's phone and electronics on Wednesday, as per a report from the New York Post citing an anonymous source. Bloomberg later reported that Coplan is facing a Department of Justice probe over alleged U.S. users.

The action occurred eight days after Polymarket, a betting market launched in New York City but restricted for U.S. users, accurately predicted former President Donald Trump's victory in this year's presidential election. On November 6, Polymarket resolved its U.S. presidential election market after the Associated Press, Fox, and NBC called the race for Trump.

In early 2022, Polymarket settled with the U.S. Commodity Futures Trading Commission (CFTC) over offering "event-based binary options," agreeing to pay $1.4 million, wind down non-compliant markets, and block U.S. users to maintain their ability to list markets without CFTC approval.

Coplan expressed his disapproval of the ongoing investigation through a post on X, stating, "It’s discouraging that the current administration would seek a last-ditch effort to go after companies they deem to be associated with political opponents… taking a more pro-business, pro-startup approach may have changed their fate this election."

According to the New York Post, Coplan was woken at 6:00 a.m. in his Soho home by U.S. law enforcement demanding his electronics; however, the FBI did not arrest him, and further comment requests to the FBI went unanswered.

Before the election, bets on Polymarket surpassed $3 billion in trading volume. Reports suggest that U.S. users have utilized VPNs to access the platform, which surged in popularity during the election season. The CFTC has been divided on permitting election-related betting markets, citing concerns for political integrity. Meanwhile, U.S.-based betting market Kalshi has taken the agency to court over their right to list election outcome contracts.

Coplan defended Polymarket's role in the election cycle, stating, "Polymarket has provided value to tens of millions of people this election cycle, while causing harm to nobody. We're deeply proud of that."

Allegations of Political Retribution

Sources close to Coplan described the FBI seizure as “grand political theater at its worst.” They speculated that the government may aim to accuse Polymarket of market manipulation and rigging its polls in favor of Trump. The source also claimed, “This is obvious political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election.”

Leading up to the election, wagers on Polymarket favored Trump significantly more than most credible polls, which indicated a close race between him and Vice President Kamala Harris.

On Wednesday, Coplan humorously noted the situation in a post: “new phone, who dis?”

Editor's note (Nov. 13, 2024 — 22:30 UTC): Adds news of alleged DOJ probe and additional context.