Polymarket Resumes Operations in the U.S.
In a significant move for the prediction markets sector, Polymarket has been given the green light to restart its operations in the United States after a three-year pause following a settlement with the Commodity Futures Trading Commission (CFTC) in 2022 regarding unregistered derivatives trading. This recent approval marks a pivotal moment for the prediction market landscape and comes as a result of Polymarket’s strategic acquisition of QCEX, which consists of licensed contract market QCX LLC and clearinghouse QC Clearing LLC, for a total of $112 million.
CFTC’s No-Action Letter
On September 3, 2025, the CFTC provided a targeted no-action letter, denoted as Staff Letter No. 9113-25, which allows QCX LLC and QC Clearing LLC certain exemptions from specific swap data reporting and recordkeeping standards for specific event contracts. Within the parameters established by the letter, if certain conditions are met, the CFTC will refrain from recommending enforcement actions regarding non-compliance on these obligations, as long as transactions adhere to QCX’s governance and are settled through QC Clearing. This development sets a narrow but essential regulatory framework, paving the way for similar future endeavors.
Implications for Prediction Markets
Polymarket’s adept maneuvering through U.S. derivatives regulations—by acquiring an already licensed entity as opposed to seeking new entry—illustrates how compliance challenges can be tackled via innovative approaches coupled with proactive regulator engagement. This situation not only enhances the position of Polymarket but also signifies a larger acceptance of prediction markets as valid financial instruments, contrasting with their previous perception as operating in a regulatory gray zone. Supporters contend that such markets can yield more precise, immediate insights compared to conventional polling methodologies, with some arguing that their informational capabilities rival those of traditional equities markets. The CFTC’s willingness to create a framework for event contracts indicates their evolving acceptance of these markets within the regulatory domain.
Political Implications
Additionally, this development carries political implications, particularly as Polymarket’s re-emergence aligns with backing from 1789 Capital—associated with Donald Trump Jr.—and occurs in the backdrop of previous investigations by the Department of Justice and the CFTC coming to a close. Whether these developments are connected or simply coincidental, they have sparked conversations about the potential influence of political factors on innovation within the financial sector, especially as prediction markets engage with electoral processes and other politically charged scenarios.
Competition in the Market
With Polymarket resuming operations, competition intensifies against Kalshi, which has entrenched itself as a CFTC-designated contract market catering to event contracts tied to political situations. The return of Polymarket ensures that multiple companies will now function under enhanced regulatory oversight, fostering a more competitive and creatively stimulating environment for prediction markets.
Future of Prediction Markets
The dual impact of the CFTC’s no-action letter combined with Polymarket’s acquisition signals a defining moment for the future of prediction markets. While it does not constitute a blanket approval, this regulatory concession offers a practical framework for these platforms to launch and operate under U.S. law. Shayne Coplan, Polymarket’s CEO, expressed gratitude toward the CFTC for their prompt and effective response, heralding this as a “green light” for the firm’s U.S. ventures.
Conclusion
This development serves as a noteworthy case study for professionals in law and finance, illustrating how judicious structuring paired with timely regulatory support can dismantle longstanding compliance challenges and forge new paths for operational legitimacy. It likewise prompts essential inquiries regarding the future regulatory environment for fintech and political betting markets, as well as crypto-related derivatives.
Kelman Law PLLC is continuously tracking shifts in cryptocurrency regulation across various jurisdictions and stands ready to assist clients in maneuvering these rapidly changing legal terrains. To learn more or arrange a consultation, please reach out through our official channels.
This article originally appeared on Kelman.law.
