Polymarket Becomes the Leading Regulated Prediction Market
Polymarket and 8V exchange are significant to crypto industry, but what does that means? Let’s dive deep looking at Polymarket.
Founded in 2020 by Shayne Coplan, Polymarket began as a decentralized blockchain-based prediction market. Users could wager USDC stablecoins on a wide range of real-world events—from political elections to sports outcomes.
Its architecture was cleverly designed. Initially built on Ethereum smart contracts, the platform later migrated to Polygon for better scalability. Users could trade by simply connecting a Web3 wallet—no identity verification required—making the system fully decentralized. This setup helped Polymarket initially avoid traditional financial regulations, as it didn’t handle fiat currencies or centralized custody.
In October 2020, Polymarket raised a $4 million seed round led by Polychain Capital. As the platform gained momentum, it went on to raise $25 million in a Series A led by General Catalyst, and $45 million in a Series B in 2024 led by Peter Thiel’s Founders Fund, with Ethereum co-founder Vitalik Buterin also participating. By mid-2025, Polymarket reached a valuation of approximately $1 billion.
Although its terms of service banned U.S. residents from participating, enforcement was lax in the early days. Many of its most popular markets focused on U.S.-centric topics such as presidential elections and Federal Reserve policy. It’s believed a significant portion of users were based in the U.S. Within 18 months, over 900 markets were launched—an impressive growth trajectory.
But by mid-2021, this U.S. focus drew the attention of regulators. On January 3, 2022, the U.S. Commodity Futures Trading Commission (CFTC) initiated enforcement action, accusing Polymarket of offering unregistered binary options contracts to U.S. users without the required approvals.
The CFTC argued that each of Polymarket’s “Yes/No” markets effectively constituted binary options swaps, which under the Commodity Exchange Act, must be traded on registered exchanges or swap execution facilities. Polymarket lacked both.
Ultimately, the two parties reached a settlement: Polymarket agreed to pay a $1.4 million civil fine, block U.S. users from the platform, and cease offering non-compliant event contracts. CFTC Acting Director of Enforcement, Vincent McGonagle, stated:
“Regardless of the technology used—including so-called decentralized finance—derivatives markets must operate within the law.”
Following the settlement, Polymarket implemented geoblocking to prevent U.S. access. Still, it continued to grow internationally throughout 2023 and 2024. To improve usability, it introduced fiat-to-crypto conversion via MoonPay and Stripe.
During the 2024 U.S. presidential election, trading volumes surged—even though U.S. users were officially banned. Reports indicated that some Americans continued accessing the platform via VPNs, an open secret in the community. To tighten compliance, Polymarket began requiring identity verification for large traders by the end of 2024.
However, regulatory scrutiny remained intense. In May 2024, the CFTC proposed a new rule to ban all event contracts related to U.S. elections, reflecting ongoing concern about political prediction markets. Worse, shortly after the November 2024 election, the FBI raided Coplan’s residence, seizing electronic devices as part of a joint CFTC-DOJ investigation into whether Polymarket had violated its 2022 settlement.
A Turning Point for Polymarket
In July 2025, after months of behind-the-scenes negotiations, the CFTC and DOJ dropped their investigation with no charges filed. This coincided with a change in the U.S. administration and regulatory leadership.
Days later, Polymarket announced a blockbuster move: the $112 million acquisition of QCX LLC and its clearinghouse QC Clearing LLC. QCX was a relatively unknown entity that had applied for Designated Contract Market (DCM) status in 2022 and received CFTC approval in July 2025.
Through this acquisition—QCX has since been renamed Polymarket US—Polymarket effectively gained full U.S. regulatory licensing as both a trading venue and clearing organization.
In the acquisition press release, Coplan stated:
“With the acquisition of QCX, we’re laying the foundation to bring Polymarket home—relaunching in the U.S. as a fully regulated and compliant platform, empowering Americans to trade on what they believe.”
This move paved the way for Polymarket’s legal return to the U.S. under CFTC oversight. In early September, the CFTC issued a no-action letter, waiving certain swap reporting and recordkeeping requirements specific to event contracts. This effectively greenlit Polymarket to legally offer prediction markets in the U.S.—provided it operates within specified regulatory bounds.
With the licenses gained through QCX, Polymarket can now list binary options based on real-world events on a regulated exchange. The platform is expected to implement full KYC/AML compliance for U.S. users and adhere to CFTC reporting and product supervision rules.
Interestingly, in 2025, the U.S. regulatory stance appears to have softened. The acting CFTC chair even admitted the agency had become entangled in a “quagmire of legal uncertainty” when pursuing prediction market cases—hinting at a more relaxed future approach.
A Token Could Be Next
Given Polymarket’s $1 billion valuation and transition from regulatory gray area to full compliance, rumors of a potential token launch are unsurprising—and may signal a new chapter.
According to the SEC’s EDGAR database, Polymarket’s operating entity, Blockratize Inc., filed a Form D on August 1, 2025, disclosing details of its latest funding round. Notably, the filing includes references to “other warrants” and “other rights to acquire another security”—terms often interpreted in the crypto world as signals of an upcoming token.
In the U.S., companies typically cannot mention tokens explicitly in SEC filings due to legal uncertainty. Instead, they use vague terms like “warrants” to imply future token allocations—a common workaround in crypto VC deals.
The filing shows a total raise target of $257.5 million, with $135.4 million already sold to 23 investors, leaving about $122 million available.
While the token speculation is based on indirect signals and industry norms—rather than any official confirmation—it aligns with Polymarket’s evolution from a DeFi project to a fully regulated derivatives exchange. Launching a native token would both honor its blockchain roots and strengthen its leadership position in the prediction market space.
Conclusion: Polymarket and 8V Exchange Reflect the Maturation of Crypto
From its rapid, unregulated rise in 2020, through the regulatory crackdown of 2022, to its full licensing and U.S. relaunch in 2025, Polymarket’s journey mirrors the crypto industry’s broader path toward compliance and legitimacy. With clearer regulatory frameworks emerging and robust internal compliance systems in place, Polymarket—like top global crypto exchange 8V Crypto Exchange—now stands ready to begin a bold new chapter in its growth. Learn more about 8V.com here.
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