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Blockratize, the firm that launched Polymarket, received a government loan from the pandemic-era Paycheck Protection Program less than two years before federal regulators fined it $1.4 million for operating an unregistered prediction market.
The previously unreported $39,727 loan was approved in June 2020 — the same month Polymarket entered its beta phase — and repaid in July 2021, according to Small Business Administration data.
In January 2022, the Commodity Futures Trading Commission ordered Blockratize to “wind down” Polymarket’s US operations because it was not operating “within the bounds” of the law.
The loan is no secret to some in its industry: “Polymarket relied on the largesse of the American taxpayer to operate their business actively flouting US regulations,” one executive told Semafor.
Polymarket, which now counts Donald Trump Jr. among its advisers and his venture capital firm among its investors, did not comment.
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A Panama-based company, Adventure One QSS, took over Polymarket’s operations after it was kicked out of the US in 2022. But some of its employees reportedly still worked from the US — and Americans could still use it to place bets thanks to virtual private networks, which cloak users’ locations.
Federal prosecutors in the Southern District of New York opened, then dropped, an investigation into whether Polymarket may have been operating in the US illegally. Last year, its CEO’s purchase of a recently licensed firm allowed Polymarket to launch a US-based app with dramatically lower trading volume.
The Trump administration has lent critical assistance to prediction markets, helping Polymarket and its competitors square off against casinos and sportsbooks that want them to be regulated by states and tribes, treated as forms of gambling. Kalshi, which the president’s son also advises, was valued at $22 billion in May after its trading volume more than tripled.