New data from Allium shows US-based users are bypassing geoblocks on the global prediction market platform, Polymarket. They dominate political betting despite efforts to restrict access.
A recent report by blockchain research firm Allium reveals that US-based users continue to dominate political bets on Polymarkets' global platform, contrary to the company's geoblocking measures. This finding highlights a significant challenge for Polymarket as it tries to comply with regulatory requirements.
According to Allium’s data, US users are responsible for the highest volume of contracts traded and wallet count in Polymarket's political markets. Despite Polymarkets' efforts to block US citizens from using its global platform following a $1.4 million settlement with the Commodity Futures Trading Commission (CFTC) in 2022, US users are still engaging heavily.
The report notes that while Polymarket has restricted access by blocking certain IP addresses and banning VPN usage, these measures have not fully deterred US-based traders. Instead, they've driven activity offshore where it is harder for regulators to monitor or intervene.
US users showed a particular interest in foreign conflict-related markets, with five of the top twelve markets by volume related to Iran's war efforts. In contrast, there was less engagement with election-related markets that are allowed on Polymarket US and Kalshi platforms.
These findings underscore the difficulty for prediction market operators like Polymarkets to effectively enforce geoblocking in an era where technology allows users to circumvent restrictions easily. The implications extend beyond regulatory compliance; they also affect how these platforms can grow their user base and maintain trust with regulators.
Traders should monitor developments as Polymarket continues its efforts to address this issue, including potential legal challenges or changes in platform policies. Additionally, the trend of US users engaging heavily on offshore prediction markets could have broader implications for regulatory frameworks governing such financial instruments.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.