CFTC Sends Subpoena to Cryptocurrency Exchange Coinbase – Here’s Why

Coinbase, one of the largest cryptocurrency exchanges in the United States, has been served a subpoena by the Commodity Futures Trading Commission (CFTC) requesting customer data related to its Polymarket prediction market, according to a source with knowledge of the matter.

The subpoena, unsealed today, seeks “public customer information” tied to Polymarket, a blockchain-based prediction platform that has been gaining traction ahead of the November election. A screenshot of an email sent from Coinbase to specific users regarding the CFTC request was shared on X (formerly Twitter) by Eric Conner, founder of Ethereum information site ETHHub.

The email advised users that Coinbase “may be required to submit information” to the CFTC due to upcoming regulatory procedures. Conner declined to comment on whether he personally uses Polymarket’s platform.

A source confirmed that the CFTC subpoena is real and is linked to Polymarket, a platform that launched in 2020 and allows users to make predictions on the outcome of events ranging from sports to politics. Polymarket rose to fame with its predictions for Donald Trump’s reelection campaign.

This isn’t Polymarket’s first brush with regulators. The CFTC filed a sanctions lawsuit against the platform for failing to register its services in 2022. The case resulted in a $1.4 million fine, and the platform subsequently blocked US citizens from accessing its services.

Polymarket scrutiny intensified after Trump’s victory, when the FBI raided the New York apartment of CEO Shayne Coplan. At the time, Polymarket spokespeople claimed the raid was “political retribution.” Bloomberg News later reported that the Justice Department was investigating.

In response to the subpoena, Coinbase stated its commitment to protecting user data while complying with legal requirements.

“Requests for information from a government are carefully reviewed by a team of trained experts,” a Coinbase spokesperson said. “In some cases, if a request is legally insufficient, the firm will object to producing information or attempt to narrow the request. However, in some cases, we may be required by law to share necessary data that is lawfully requested by a government.”

*This is not investment advice.