U.S. commodities regulators are examining whether Polymarket failed to comply with a 2022 settlement that required the prediction-market platform to block U.S. users, placing renewed pressure on a sector already caught between federal derivatives rules and aggressive state enforcement.
The Commodity Futures Trading Commission’s review is focused on Polymarket’s controls for U.S. access, including advertising, customer onboarding and safeguards intended to prevent domestic customers from using the platform. A breach finding could reopen a dispute that Polymarket believed it had resolved four years ago, while giving regulators a high-profile test case for how offshore or decentralized event-contract platforms police geographic restrictions.
Polymarket paid a $1.4 million civil penalty in 2022 to settle CFTC allegations that it operated unregistered event-based contracts. Under that order, the company was required to cease offering access to U.S. persons. The current examination centers on whether its later controls adequately enforced that prohibition.
Prediction markets face competing regulators
The Polymarket matter arrives as the CFTC takes a more direct role in defending federal jurisdiction over prediction markets. The agency has sued Utah in federal court after state officials sought to recover as much as $60 million in alleged illegal profits connected to event contracts.
Utah’s action reflects a growing state-level challenge to platforms that allow users to trade contracts based on elections, sports, economic figures and other real-world outcomes. States have argued that some of these products amount to unlicensed gambling or otherwise fall under local consumer-protection laws. Prediction-market operators and the CFTC have generally maintained that federally regulated event contracts belong under the Commodity Exchange Act.
The jurisdictional question is also moving through the courts in other states. New Jersey officials asked the U.S. Supreme Court in September 2025 to review a dispute involving Kalshi, a federally regulated prediction-market operator. Related legal battles have emerged in Michigan and Ohio. As of Tuesday, the Supreme Court had not indicated whether it would hear the New Jersey case.
A Supreme Court review could establish a clearer boundary between state gaming laws and the federal derivatives regime. Without one, platforms may face a patchwork of restrictions even where they argue that their products have federal approval or oversight.
Millennium Management, which manages about $97 billion, is developing tools that would allow its portfolio managers to use data from Polymarket and Kalshi as signals for traditional asset classes, according to people familiar with the work. The firm has not directly traded prediction-market contracts. Its interest shows why the legal outcome extends beyond political betting: event-market prices are increasingly being examined as real-time indicators of economic and policy expectations.
Treasury outlines post-clarity framework plans
Treasury Secretary Scott Bessent said the Treasury Department plans to work through actions by the Securities and Exchange Commission and the CFTC to advance a digital-asset oversight framework after Congress failed to pass the clarity act.
Bessent also said wider stablecoin use would increase demand for U.S. dollars and U.S. Treasuries. The comments place stablecoin policy alongside the administration’s broader interest in preserving dollar demand, rather than treating digital assets solely as a market-structure issue.
The legislative setback leaves federal agencies with substantial influence over the near-term direction of U.S. crypto policy. The SEC and CFTC have overlapping but distinct claims over parts of the digital-asset market, and their decisions on registration, custody, market access and disclosures will shape how banks and platforms structure services before Congress establishes a comprehensive statute.
Banks expand crypto services through outside infrastructure
Large U.S. banks are continuing to add digital-asset functions, often through external providers rather than by building trading systems inside their consumer applications.
PNC private-bank clients can buy, sell and hold bitcoin through the bank’s platform using Coinbase infrastructure. JPMorgan is integrating Chase accounts, cards and rewards with Coinbase, though it is not adding bitcoin trading directly to the Chase banking app. The different approaches show banks separating customer-account connectivity from the more regulated and operationally complex task of directly operating crypto trading services.
Citi has partnered with Coinbase on corporate stablecoin payment services, while Ripple and Robinhood have announced a stablecoin arrangement connecting Robinhood’s retail and institutional platforms with Ripple infrastructure. Ripple said its RLUSD stablecoin is live on Robinhood Chain and Bitstamp by Robinhood, with a Robinhood app launch planned later in 2026. The company also expects RLUSD to support institutional settlement on the XRP Ledger.
Bank of New York Mellon has added custody support for XRP and RLUSD for eligible institutional clients on its digital-asset platform. The bank is also exploring tokenized trade-finance work with Ripple and working-capital platform C2FO, including the tokenization of receivables on the XRP Ledger.
These projects remain selective and largely focused on custody, payments and settlement rather than broad retail trading. Yet they place established financial institutions closer to blockchain-based transaction systems while regulators are defining the rules those services will need to follow.
Europe and Brazil tighten platform requirements
In Europe, Coinbase said it will automatically convert European Economic Area retail balances in 14 restricted assets on Oct. 30, 2026, citing the EU’s markets in crypto-assets regulation. The affected assets include USDT, PYUSD, USD1, DAI, PAX, GUSD, GYEN, UST, RAI, PAXG and TGBP.
MiCA’s stablecoin rules are forcing platforms to determine which tokens can remain available to EEA retail customers and which must be converted or restricted. The operational burden falls on exchanges and custodians, but users holding affected balances face changes to the assets available in their accounts.
In Brazil, Binance submitted a crypto service provider licence application through its local entity BBrasil on Oct. 23, ahead of an Oct. 30 application deadline for existing providers. Binance said the filing does not constitute approval. The company is also limiting services including crypto lending and margin trading for Brazilian users and plans to delist 22 assets locally.
The simultaneous developments in the United States, Europe and Brazil show that crypto platforms increasingly face regulation based on product type, user location and legal entity structure. For prediction markets, that pressure is particularly immediate: the outcome of the Polymarket review and the state-federal court battles will help determine whether geographic blocks and federal registrations are enough to keep event contracts available in the U.S. market.
Want deeper insight into event contracts and regulation? Explore our guide on Toobit event contracts and trading rules.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
