The Federal Bureau of Investigation on Wednesday raided the New York City apartment of Shayne Coplan, the 26-year-old founder of the crypto-fueled election gambling website Polymarket. During the raid, agents woke up Mr Coplan at 6 am and seized his phone and other electronic devices without providing a clear explanation. The raid came after Polymarket accurately predicted an easy Trump triumph over Vice President Kamala Harris, as opposed to traditional polls. A source told the New York Post that the government is allegedly trying to accuse Polymarket of market manipulation and rigging its polls in favour of Trump.
"It's grand political theatre at its worst. They could have asked his lawyer for any of these things. Instead, they staged a so-called raid so they can leak it to the media and use it for obvious political reasons," the source told The Post.
A Polymarket spokesperson said the FBI raid was "obvious political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election."
On X, Polymarket CEO also addressed the matter and wrote, ''It's discouraging that the current administration would seek a last-ditch effort to go after companies they deem to be associated with political opponents. We are deeply committed to being non-partisan, and today is no different, but the incumbents should do some self-reflecting and recognize that taking a more pro-business, pro-startup approach may be what would have changed their fate this election.''
Notably, Polymarket made headlines in the lead-up to the presidential election for its bold prediction. Although it doesn't allow trading in the US, some users have found ways to bypass this restriction using VPNs. Before the election, Polymarket's odds heavily favoured Trump, giving him a 58% chance of winning, which later surged to 95% as the night progressed. The site also gained scrutiny after a mystery French trader, known as the polymarket whale, made large bets on Trump winning the election.
The FBI's investigation comes a week after Mr Coplan said Polymarket is planning to return to the US.
Polymarket's links To Trump and his allies
Polymarket has strong ties to Donald Trump and his allies. The platform received $70 million in funding from billionaire Trump supporter Peter Thiel, as reported by Forbes earlier this year. What's more, Polymarket CEO Shayne Coplan has also been spotted getting cosy with Donald Trump Jr.
In 2022, the platform was forced to halt US trading and cough up $1.4 million to settle charges with the Commodity Futures Trading Commission for failing to register with the agency. Since then, the platform has only been available for bettors in other countries.
Wash-trading allegations
Just a week before the election, a Fortune report noted that analysts from two crypto research firms uncovered widespread evidence of wash-trading on Polymarket. Wash trading is an illegal form of market manipulation where a trader buys and sells the same asset to create a false impression of market activity.
"Polymarket's Terms of Use expressly prohibit market manipulation. We strive to provide users with the fairest analysis possible and our transparency allows the market to decide," a Polymarket spokesperson told Fortune in a statement.
