Polymarket Approved by CFTC! Prediction Market Giant Lifts Ban, Makes Strong Return to the US

Polymarket is preparing to relaunch its business in the US after obtaining regulatory approval from the US Commodity Futures Trading Commission (CFTC). This marks the prediction market platform’s official return to the US market, nearly three years after being excluded by regulators. On Wednesday, the CFTC confirmed it had issued a no-action letter covering Designated Contract Market QCX LLC and Derivatives Clearing Organization QC Clearing LLC.

CFTC No-Action Letter Clears Path for Return

(Source: CFTC)

On December 3, the US Commodity Futures Trading Commission confirmed it had issued a no-action letter covering Designated Contract Market QCX LLC and Derivatives Clearing Organization QC Clearing LLC. Earlier this year, Polymarket acquired both companies as part of its plan for a legal return to the US prediction market. The agency’s Division of Market Oversight and Division of Clearing and Risk issued a no-action letter, temporarily exempting certain swap data reporting and record-keeping requirements related to event contracts, including binary options and variable payout trading.

According to the letter, the CFTC stated that as long as the relevant activities comply with the strict conditions outlined in the approval, it would not recommend enforcement action against the two entities or their participants for failing to meet certain swap transaction-related reporting obligations. In addition, this exemption does not relieve these companies of broader regulatory compliance requirements, but it does remove a key barrier to launching a compliant prediction market in the US.

A No-Action Letter is a special tool used by US regulators that allows businesses to conduct activities that might otherwise violate current rules, under specific conditions, without facing enforcement action. This mechanism creates space for innovation while maintaining regulatory oversight. For Polymarket, the letter means it can operate a prediction market within a regulated framework without being penalized for certain technical compliance issues.

Polymarket founder and CEO Shayne Coplan confirmed the development on X, stating the platform had received the “green light to go live in the US.” He praised the CFTC and its staff for completing the process at record speed and added that the company would soon share more updates. This high efficiency from regulators signals a substantial shift in the regulatory environment, against the backdrop of the Trump administration’s friendly stance toward crypto and financial innovation.

From $1.4 Million Fine to Regulatory Approval: A Difficult Journey

This approval marks the end of Polymarket’s long regulatory journey. In 2022, the CFTC fined the platform $1.4 million for operating an unregistered derivatives trading venue and ordered it to block US users. Although Polymarket officially exited the US prediction market, regulators later investigated whether Americans continued accessing the site via VPN.

In November 2024, the investigation escalated when the FBI raided Coplan’s Manhattan residence and seized electronic devices. The raid sparked a strong backlash in the crypto community, with many viewing it as regulatory overreach against an innovative business. However, in July, both the Department of Justice and the CFTC closed their investigations into Polymarket, taking no further enforcement action. The end of these investigations removed the last legal barrier to Polymarket’s return to the US market.

Polymarket Regulatory Timeline

2022: Fined $1.4 million by CFTC, US users banned

November 2024: FBI raids founder’s residence, seizes electronic devices

July 2025: DOJ and CFTC close investigation, no further enforcement action

August 2025: Acquires QCX and QC Clearing for $112 million

December 2025: Receives CFTC no-action letter, officially returns to US

A few days after the investigations ended, Polymarket acquired Florida-based derivatives exchange QCX and its clearing division QC Clearing for $112 million. This acquisition gave Polymarket a Designated Contract Market license and a regulated clearinghouse, allowing it to operate under the same framework as federally regulated US trading venues. This strategic acquisition shows Polymarket is taking a compliance-first approach as it re-enters the US prediction market.

$6 Billion in Trading Volume Shows Prediction Market Demand

Despite the US ban on gambling, Polymarket has rapidly expanded overseas. In the first half of 2025 alone, users placed about $6 billion in bets on event outcomes. During the 2024 US presidential election, the platform’s prediction market drew global attention for its close tracking of Donald Trump’s odds of victory. Many observers noted that Polymarket’s predictions were more accurate than traditional polls, sparking debate about whether prediction markets could be a more reliable forecasting tool.

In November, Polymarket disclosed it had received a revised Designation Order from the CFTC, formally allowing it to operate as a regulated US exchange. The approval permits intermediated trading through futures brokers and allows brokerage firms to directly solicit clients, putting Polymarket under the same regulatory framework as other federally regulated trading venues. The company also said it implemented upgraded market surveillance, clearing procedures, and regulatory reporting systems ahead of a full public relaunch.

By November, Coplan confirmed that Polymarket had begun limited beta live testing on US exchanges, quietly recruiting selected users for real-money trading while completing the final regulatory steps. This phased rollout shows the company is carefully managing its re-entry into the US prediction market, ensuring all systems operate smoothly under regulatory scrutiny.

Political Ties and Platform Expansion

The prediction market platform continues to attract institutional and political attention. In August, Donald Trump Jr. joined Polymarket’s advisory board after his venture firm 1789 Capital invested tens of millions of dollars in the company. This political connection sparked some controversy, with critics concerned it could affect the platform’s neutrality, while supporters argued it signaled prediction markets were gaining mainstream acceptance.

Polymarket has also partnered with Elon Musk’s X, integrating its prediction market with xAI’s Grok chatbot. This integration allows X users to directly view Polymarket’s prediction data on the platform, significantly increasing visibility and usage. Recently, Polymarket launched a 4% APY on certain long-term political and geopolitical contracts, including markets related to the 2028 US presidential election.

With the CFTC’s rare no-action approval, Polymarket is betting that a $10 billion US sports app will transform it from a crypto fringe player into a representative of regulated prediction markets. This transformation is not only a business strategy but also a turning point for the entire prediction market industry, potentially paving the way for other similar platforms.