Marc Hochstein is CoinDesk's Deputy Editor-in-Chief for Features, Opinion, Ethics and Standards. He holds BTC above CoinDesk's disclosure threshold of $1K and de minimis amounts of other digital assets (details in bio).
Polymarket is reportedly under investigation by the Department of Justice for allowing U.S. residents to trade on its platform, despite a regulatory settlement prohibiting such activity.
Polymarket is forbidden to serve U.S. residents under a 2022 settlement with the Commodity Futures Trading Commission. It has been blocking users with U.S. IP addresses from trading. What can companies that geofence the U.S. practically do to prevent Americans from accessing their services through VPNs? And what does the government expect firms to do?, the main thing a company can do to prevent people in restricted jurisdictions from accessing its services is to make them go through a know-your-customer process.Of course, KYC has downsides for users, including law-abiding users, who are asked to share sensitive personal information.
Polymarket has a mobile app available to U.S. users, but it only displays the odds generated by its markets and does not enable trading. The company has marketed aggressively on social media, but such platforms are global by definition. "A company that did not have a track record of violations, practically speaking, is held to a different standard," Ackerman told CoinDesk."Now, obviously had a track record ofIn Ackerman's view, simply blocking IP addresses from the U.S. would not be sufficient to comply with such an order.
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