Coinbase Inc. (COIN) is warning customers that a U.S. regulator is demanding information about interactions with prediction market company Polymarket, according to a person familiar with the matter, and Coinbase has sent messages to customers saying the exchange may need to share this data.
Copies of emails shared with some customers have been circulating on social media sites, and those warnings about requests from the U.S. Commodity Futures Trading Commission (CFTC) are accurate, the person said. The US derivatives regulator has fought a long legal battle with prediction market companies, and this latest move comes just days before the agency’s leadership switches from Democrat to Republican when President-elect Donald Trump takes office. functions.
“When we receive requests for information from a government, each request is carefully reviewed by a team of qualified experts using established procedures to determine its legal sufficiency,” a Coinbase spokesperson said in a statement sent by email, although the company declined to confirm receipt of the request. specific assignment. “If necessary, we will seek to narrow requests that are overly broad or vague in order to provide a more tailored response, and in some cases we object to the production of information.”
The CFTC lost an initial case against prediction market company Kalshi when a U.S. federal judge ruled late last year that the agency could not ban the company from listing election contracts. However, the regulator quickly filed an appeal to a higher court, and Polymarket argued in this new legal dispute that only Congress could stop election betting.
Read more: US Election Betting: Federal Court ‘erred’ in allowing Kalshi to launch prediction markets, CFTC says
Neither the CFTC nor Polymarket immediately responded to a request for comment on efforts to collect customer information.
On January 20, Trump will take back the White House and can appoint a new president to replace Rostin Behnam, who led the CFTC during its long legal dispute with the prediction companies. Incumbent Republican commissioners Caroline Pham and Summer Mersinger have attracted attention as potential candidates for the open presidency, as has former commissioner Brian Quintenz.
