CFTC Subpoenas Coinbase in Polymarket Case under Biden

• CFTC asks that Coinbase reveal customer data connected to Polymarket.
• Subpoena provokes uproar as regulatory tensions rise ahead of Trump’s inauguration.

In light of an ongoing investigation into the decentralized prediction market Polymarket, the U.S. Commodity Futures Trading Commission issued a subpoena to Coinbase. The move made headlines and renewed free speech debate over overreaching regulations in the crypto sector and information sought concerning customers.

EIP-1559 coauthor Eric has shared with the development that it has posted a Coinbase email explaining a subpoena to users.Coinbase assured customers that they need not take any action and emphasized its obligation to share account information with the CFTC. They warned that failure to comply would result in a formal cessation of operations on January 15, 2025.

This is the newest event in a series since the U.S. Department of Justice started looking into Polymarket in late 2024. They accused Polymarket of letting users in the U.S. make illegal bets. The trouble for Polymarket began when the FBI raided its CEO and took some electronic devices. This happened after claims that Polymarket predicted Donald Trump’s election win, which many said went against free speech.

Coinbase CEO Reacts Cautiously

Coinbase CEO Brian Armstrong, the vocal critic of heavy-handed regulatory actions previously condemned the raid on Polymarket’s chief executive by the FBI, saying it an act that would backfire and strengthen Polymarket which he later took down and placed a more temperate comment under it that; Deleted my prior tweet until all facts are in, but doesn’t look good.

Armstrong has not publicly said anything about the CFTC subpoena. Not even the timing of the subpoena, coming just days before the inauguration of President-elect Donald Trump on January 20, 2025, added to speculation over motive. The pro-crypto stance from criticizing government sales of confiscated Bitcoin to integrating crypto into national policy brings huge change in regulatory dynamics for Trump.

It is not well articulated what this would mean for Coinbase, but the CFTC’s action is going to show that crypto platforms are under a great deal of scrutiny. Industry leaders such as Elon Musk and Mark Zuckerberg have criticized the action previously, claiming it undermines free speech and innovation.

The results of the CFTC’s crackdown on Coinbase are likely to set a precedent for how regulatory agencies treat customer data and compliance in the crypto space. Tensions are running high as the industry waits for further development of the policies that the Biden administration has laid out, which it may have to face when an overhaul is implemented under the incoming Trump administration.