The CEO of Polymarket says the prediction market is intent on officially re-entering the U.S. soon, boosted by the acquisition of derivatives exchange QCX and its affiliated clearinghouse.
Polymarket announced on Monday it is acquiring the holding company of QCX and clearinghouse QC Clearing LLC (collectively QCEX) for $112 million. QCX is licensed by the Commodity Futures Trading Commission (CFTC) and, as of July 9, is a Designated Contract Market (DCM), the registration necessary to offer event contracts. QC Clearing, meanwhile, is a registered Derivatives Clearing Organization.
Statements from Polymarket and its leader make it clear that securing QCEX’s licensing is a key motivation behind the acquisition.
“The acquisition of the QCEX entities paves the way for U.S. users to access Polymarket in the near future within a fully regulated, U.S.-compliant framework,” added the company.
Founder and CEO Shayne Coplan added that his company is “laying the foundation to bring Polymarket home” to the U.S. market.
QCEX Founder Sergei Dobrovolskii called Polymarket “a cultural phenomenon” and added that his firm will leverage its licenses, technology and expertise in retail trading to help Polymarket reach its full potential.
(Re)Born in the USA?
As it stands, the party line is that Polymarket is unavailable in the U.S., a prohibition that was agreed upon as part of a settlement it struck a settlement with the CFTC in January 2022 as a result of it allegedly failing to register with the federal derivatives regulator.
However, whether or not users have actually been blocked in the States has been a point of contention. Sportico reported last week that Polymarket spent more than $1 million on Facebook and Instagram advertising last fall that specifically targeted U.S. customers.
Until very recently, the Manhattan-headquartered firm had been under two separate investigations from the CFTC and the Department of Justice (DOJ) probing the possibility that Polymarket had still been taking action from U.S.-based customers. However, those investigations, which intensified under Joe Biden’s presidency, have been abandoned entirely by President Donald Trump’s administration.
That change of tack comes as Kalshi board member and former Crypto.com advisor Brian Quintenz awaits a decision on whether he will be confirmed as the new chair of the CFTC. Quintenz is Trump’s nominee for the position.
At a hearing of the Senate Committee on Agriculture, Nutrition, and Forestry last month, Quintenz suggested he would not look to take action to prevent prediction market operators from offering sports contracts, implying that such products are legal under the Commodity Exchange Act (CEA).
The committee is set to meet Monday to discuss whether or not to advance Quintenz’s nomination to the full Senate floor.
‘Demand is greater than ever’
Polymarket’s profile rose in the U.S. during last year’s election lead-up, and it reportedly handled around $2.6 billion in trading volume in November alone. In its July 21 release, the company described itself as “the world’s largest prediction market and a trusted source of real-time information” and stated that its users made around $6 billion in predictions on the platform in the first half of this year.
Like several other prediction markets including Kalshi and Crypto.com, Polymarket offers a slate of political and current events trading and also has a notable presence in sports. It runs numerous sports-focused social media accounts and does plenty of trading on sports in other jurisdictions such as Europe.
“Demand is greater than ever — not just in user growth and trading volume, but in how mainstream audiences are turning to Polymarket to separate signal from noise, bias, and speculation,” added Coplan in the July 21 release.
Its increased prominence was reflected in a landmark deal with X, formerly Twitter, last month which made the company the official prediction market partner of the social media giant.
Now, Polymarket appears ready to take on America again.
