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US CFTC has issued a subpoena targeting one of the biggest crypto exchange Coinbase. According to information posted on the X platform by Eric.eth, co-author of EIP-1559, Coinbase is being subpoenaed by the Biden administration’s Commodity Futures Trading Commission (CFTC) in connection with the Polymarket case.
The subpoena requires Coinbase to furnish information about certain users. The incident comes as CFTC had previously heightened its scrutiny over Polymarket. The case also comes as an aftermath of Biden government’s not so friendly stance on crypto.
Coinbase Informs Customers About Subpoena
After the subpoena was issued to Coinbase, the platform had sent an email to inform its customers about the same.
The platform wrote that customers are not required to take any action, but Coinbase may have to send account-related information to the Commodity Futures Trading Commission in compliance with the subpoena unless Coinbase formally receives a motion to revoke the subpoena or other legal documents that prohibit Coinbase from sharing such information before the end of business on January 15, 2025.
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What is a Subpoena?
A formal order known as a subpoena requires an individual or group to: Provide testimony; Produce papers or other evidence; and Appear in court or other legal processes.
A court, lawyer, or government agency can issue subpoenas. They guarantee that all parties have access to pertinent material and are an essential tool in the discovery process.
CFTC’s Previous Warning to Polymarket
The online betting platform Polymarket has time and again had a bone of contention with many regulators.
Although much of the activity on Polymarket was driven by US elections in 2024, the platform is not authorized by the government to offer services to American users.
The Commodity Futures Trading Commission (CFTC) penalized the business $1.4 million in 2022 for violating rules pertaining to the sale of event-based binary options. The CFTC claims that Polymarket contracts are regulated swaps and can only be made available to US investors on a licensed exchange.
Following the CFTC’s proceedings, Polymarket consented to, at least in principle, ban users who were based in the United States.
However, 2024 saw a heightened use of Polymarket, especially to bet big on elections and Donald Trump’s victory chances. The rise in bet money during the US presidential elections also saw France mulling to ban Polymarket in the nation.
The market will now closely monitor Coinbase’s upcoming moves and CFTC’s future stance to access if the regulator loosens some of its strict stance or ends up becoming more vigilant in the future.
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