As the 2024 US presidential race heats up, a new frontier for political betting has emerged in the crypto world. Platforms like Polymarket, Kalshi, and PredictIt are seeing a surge in betting on the election outcome, even as US regulators crack down on the activity.
At the heart of this trend is Polymarket, a company Decentralized Finance A DeFi platform that allows users to bet on everything from election winners to the possibility of alien detection.
Cryptocurrency Betting Madness at Polymarket
According to a recent Bloomberg report, a reportThe volume of open bets on Polymarket regarding the US election outcome has increased by more than 500% in recent months, approaching the $1 billion mark.
According to the report, this surge in activity was driven in part by “high-profile events” such as President Joe Biden’s withdrawal from the race and Assassination attempt About former President Donald Trump.
This growth is especially impressive considering that Polymarket claims to have excluded US-based users since 2022 as part of a settlement with the Commodity Futures Trading Commission (CFTC). However, the reality on the ground appears to be quite different. I interviewed US officials Polymarket Users reveal that the platform’s system of blocking US traders is easily circumvented using virtual private networks (VPNs).
Additionally, social media is reportedly full of instructions on how to access the platform from the U.S. Bloomberg reported that some traders have been openly discussing their activities on PolyMarket on social media, ignoring the platform’s stated restrictions.
Regulators warn of ‘integrity risks’
According to the report, this development raises great concerns among US regulators, who have become more vocal about the need to take strict measures against Election related betting.
CFTC Executive Director Ian McGinley hailed the Polymarket settlement as evidence that “all derivatives markets must operate within the law regardless of the technology or legal structure used.” However, legal experts argue that the CFTC’s guidance on how DeFi platforms can effectively ban US users was lacking.
“In addition to the lack of regulation, DeFi protocols currently don’t have much guidance on how to effectively comply,” said Elizabeth Davis, a partner at Davis Wright Tremaine and former lead CFTC trial attorney.
Cryptocurrency Champions Like Former President Donald Trump Polymarket has already shared its predictions on his chances of returning to the White House, with the platform’s data indicating his chances of winning are 55%.
However, CFTC Chairman Rostin Behnam warned that these election-related contracts “ultimately commodify and degrade the integrity of America’s unique experience of participating in the democratic electoral process.”
At the time of writing, the total cryptocurrency market cap is $2.17 trillion. Bitcoin, on the other hand, is trading at $63,800, down more than 1% in a 24-hour time frame.
Featured image by DALL-E, chart by TradingView.com