Digital currency platform, Coinbase Inc. (COIN), has alerted its customers of a potential information request from a U.S. regulatory body asking for transactional data involving the predictive market company, Polymarket. This revelation was made by an individual privy to the ongoing situation, who also confirmed that Coinbase sent notifications to its customers about the possibility of releasing their data.
These email notifications have been shared by some customers on various social media platforms, with the warning about requests from the U.S. Commodity Futures Trading Commission (CFTC) confirmed as accurate. The CFTC has been involved in a lengthy legal dispute with prediction market companies. Interestingly, this development is happening just before a change in leadership at the agency, with the switch from Democratic to Republican control imminent as President-elect Donald Trump assumes office.
A representative from Coinbase, while not confirming the specific subpoena, stated in an email that whenever they receive a government information request, their team of trained professionals carefully reviews the request to ascertain its legal validity. If necessary, the company will aim to restrict overly broad or vague requests to ensure a more precisely tailored response. In some instances, the company will resist providing any information.
The CFTC, in a previous legal tussle, lost a case against prediction market firm Kalshi. A U.S. federal judge ruled late last year that the regulator had no authority to prevent the company from listing election contracts. Despite this setback, the CFTC appealed to a higher court. Polymarket, in this ongoing legal battle, maintained that only Congress possesses the power to halt election betting.
Neither the CFTC nor Polymarket has immediately responded to requests for comment on this data collection effort.
When Donald Trump takes office on January 20, he will have the power to appoint a new chairman to succeed Rostin Behnam, who has helmed the CFTC during its protracted legal conflict with prediction businesses. Caroline Pham and Summer Mersinger, current Republican commissioners, along with former Commissioner Brian Quintenz, have been mentioned as possible candidates for the chairmanship.
