Coinbase Inc. (COIN) is warning customers that a U.S. regulator is demanding information about interactions with prediction market firm Polymarket, according to a person familiar with the situation, and Coinbase has sent messages to customers saying it is possible that the exchange has to share that data.
Copies of emails shared with some clients have circulated on social media sites, and those warnings about the U.S. Commodity Futures Trading Commission (CFTC) requests are accurate, the person said. The US derivatives regulator has waged a protracted legal battle with prediction markets firms, with this latest move coming just days before the agency’s leadership shifts from Democrat to Republican as President-elect Donald Trump takes office.
“When we receive requests for information from a government, each request is carefully reviewed by a team of trained experts using established procedures to determine its legal sufficiency,” a Coinbase spokesperson said in an emailed statement, although the company declined to confirm receipt of the request. specific citation. “Where necessary, we will try to limit requests that are too broad or vague to provide a more appropriate response and, in some cases, we will object to producing any 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 stop the company from listing election contracts. However, the regulator quickly filed an appeal to a higher court, and Polymarket argued in that new legal clash that only Congress can stop election betting.
Read more: US election betting: Federal court ‘wrong’ to allow Kalshi to launch prediction markets, CFTC says
Neither the CFTC nor Polymarket immediately responded to a request for comment on the effort to collect customer information.
On Jan. 20, Trump will take back the White House and be able to name a new president to replace Rostin Behnam, who led the CFTC during its long legal dispute with prediction companies. Incumbent Republican commissioners Caroline Pham and Summer Mersinger have drawn attention as potential candidates for the open chair, as has former commissioner Brian Quintenz.
