Polymarket at center of political storm after reported FBI raid

Prediction betting market Polymarket and its founder and CEO Shayne Coplan have found themselves at the center of a debate about political betting after the FBI reportedly raided Coplan’s home on Wednesday.

The FBI seized a cellphone and other electronic devices in a raid of Coplan’s New York City apartment early Wednesday, multiple media outlets reported, citing unnamed sources. Coplan turned over his devices and was not arrested or charged, according to the reports.

It was not immediately clear if he or Polymarket are targets of an investigation. The Justice Department declined to comment, and the FBI's national and New York offices said they cannot confirm or deny the reports.

The New York Times reported the raid was part of a probe by the FBI and the U.S. attorney’s office for the Southern District of New York into whether Polymarket was run as an unlicensed commodities exchange that allowed users in the United States to illegally place bets on its platform.

Neither prosecutors with the attorney's office nor Polymarket responded to a request for comment.

Polymarket, founded by Coplan in 2020, has faced scrutiny for its election betting markets, which reportedly brought in more than $3.6 billion from bets on the presidential election, according to an NBC News analysis.

This included about $1.5 billion on President-elect Trump and $1 billion on Vice President Harris, the analysis stated, and concerns were raised over whether the odds and election betting markets may have played a role in his victory.

Polymarket is among the most popular election betting markets but is prohibited from taking bets inside the U.S. following a 2022 settlement with the Commodity Futures Trading Commission (CFTC). As part of the deal, Polymarket was ordered to pause trading and pay a $1.4 million fine for failing to register with the agency.

The platform received large trades in the lead-up to Nov. 5 from a French trader, prompting additional criticism of the platform. Bloomberg reported the user was expected to take home about $48 million as a result of Trump’s victory.

Coplan has not spoken publicly on the incident, but he posted on the social platform X later Wednesday, “new phone, who dis?” seemingly referring to the seizure of his phone.

In a later post, Coplan slammed the Biden administration for what he believes is a targeted effort for his company’s association with President-elect Trump’s victory last week.

“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,” he wrote. “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.”

The Biden administration has faced criticism over its approach to some tech firms, including its crackdown on antitrust and cryptocurrency. The White House did not respond to a request for comment.

Tech billionaire and emerging Trump ally Elon Musk was among a series of pro-crypto figures to rally around Coplan in the wake of the reports.

“Indeed,” Musk said in a response to Coplan, while Brian Armstrong, the co-founder and CEO of Coinbase, originally posted that the raid will “backfire” and make Polymarket “even more powerful.”

He later deleted the post, writing instead, “Deleted my prior tweet until all the facts are in - but doesn’t look good.”

Musk responded to Armstrong’s since-deleted post, “This seems messed up.”

The raid caught the attention of some on Capitol Hill.

Rep. Claudia Tenney (R-N.Y.), who serves on the House Ways and Means Committee, suggested the raid could be seen as "overly aggressive" depending on what probable cause authorities had before seizing Coplan's devices.

"They're claiming there may be some kind of betting that's going on overseas funneled through VPNs and other sources. But it does look a little overly aggressive," she told Fox Business Channel Thursday. "It kind of has that look of maybe somebody that looks like they might be supporting Trump has to be raid at 6 a.m. like Roger Stone and so many others."

Investor Kevin O'Leary noted the investigation should not take long to determine if Polymarket did something illegal.

"It's all online. It's all on the blockchain, they'll be able to do this in a matter of a week or so to see if the company in fact broke the rules," O'Leary told Fox Business Channel.

A federal appeals court decision officially deemed election betting in the U.S. legal just last month, siding against the CFTC, which asked the court to block prediction exchange platform Kalshi from offering “Congressional Control Contracts.”

Kalshi allowed users to bet on which political party would control the House and the Senate after the election.

Updated at 4:18 pm EST.