CFTC Approves Polymarket’s US Return After 3-Year Ban

Polymarket, the world’s largest prediction market platform, has received regulatory clearance to return to the United States after three years of operating abroad. The Commodity Futures Trading Commission (CFTC) issued a no-action letter this week, granting the platform exemption from certain reporting and recordkeeping requirements for event-based contracts.

The relief applies to QCX LLC and QC Clearing LLC, two licensed entities that Polymarket acquired for $112 million to facilitate its reentry into the US. According to the CFTC’s Division of Market Oversight and Division of Clearing and Risk, the no-action stance specifically covers swap data reporting obligations, allowing QCX and QC Clearing to operate event contract markets without facing penalties for limited non-compliance.

Polymarket had previously blocked American users in 2022 after the CFTC found it was operating an unregistered derivatives exchange. Since then, the company expanded internationally, building a strong user base trading on everything from elections and economic indicators to entertainment outcomes.

Regulatory Framework

The letter applies narrowly to binary options and variable payout contracts executed on QCX and cleared through QC Clearing. The move mirrors similar relief granted to other licensed derivatives markets and signals growing regulatory acceptance of prediction markets. Acting CFTC Chair Caroline Pham has described such platforms as a “new frontier” for financial innovation, highlighting their potential role in information aggregation.

The approval also validates Polymarket’s strategy of purchasing regulated infrastructure to ensure compliance, potentially setting a template for other firms seeking US market access.

Market Dynamics

Polymarket’s return comes amid surging activity in event contracts, with rival Kalshi recently winning a legal battle against the CFTC that opened the door for political event contracts. Kalshi’s success drew substantial venture capital backing, reaching a $2 billion valuation from a $185 million round.

Polymarket, meanwhile, secured investment from 1789 Capital, a fund linked to Donald Trump Jr., underscoring growing institutional and political interest in prediction markets. Supporters argue these platforms efficiently aggregate information, while critics liken them to digital casinos.

Implementation And Broader Context

The CFTC’s relief applies only under limited conditions, but it provides clarity for participants trading on QCX and QC Clearing. They remain subject to other CFTC rules on derivatives trading. Still, the decision highlights a more innovation-friendly regulatory climate under the Trump administration, with the CFTC signaling its willingness to accommodate new financial technologies.

With trading volumes rising—especially around political and macroeconomic events—Polymarket’s return marks a pivotal moment for prediction markets in the US, bridging speculative interest with institutional participation.

Disclaimer: The content above reflects the author’s personal views and does not represent any official position of Cobic News. The information provided is for informational purposes only and should not be considered as investment advice from Cobic News.