From Offshore Outlaw to NYSE-Backed Exchange: Polymarket’s US Relaunch Explained

Four years after the CFTC forced it offshore with a $1.4 million fine, Polymarket officially began onboarding US users on January 20, 2026—backed by a $9 billion valuation, a $2 billion investment from the New York Stock Exchange’s parent company, and a $112 million regulatory acquisition that bypassed years of federal licensing. But the relaunch arrived under a cloud: the same week, 12 US Senators demanded an insider trading investigation after a single account turned $32,000 into $436,000 hours before a classified military operation became public, and Nevada filed a lawsuit to block the platform entirely.

The Regulatory Shortcut: How Polymarket Bought Its Way Back In

Getting a CFTC license from scratch takes years. Kalshi spent the better part of four years fighting through applications, court battles, and appeals before establishing its Designated Contract Market status. Polymarket took a different path entirely.

On July 21, 2025, Polymarket announced it had acquired the holding company of QCEX—a CFTC-licensed derivatives exchange (QCX LLC) and clearinghouse (QC Clearing LLC)—for $112 million in cash and equity. The deal gave Quadcode Group, the seller, a meaningful equity stake and ongoing partnership with Polymarket. More importantly, it gave Polymarket immediate access to both a Designated Contract Market (DCM) license and a Derivatives Clearing Organization (DCO) license—the two federal approvals needed to legally offer event contracts to US traders.

QCEX, based in Boca Raton, had first applied for its license in June 2022 and received CFTC approval on July 9 of that year. By purchasing these licenses rather than earning them, Polymarket executed what critics call a “reverse merger” into regulatory compliance—bypassing years of federal red tape in a single transaction.

The CFTC granted an Amended Order of Designation in November 2025, and by December, Polymarket had launched a limited US beta. The platform now operates as an “intermediated contract market” with KYC/AML requirements and verified data feeds—a far cry from the unregistered, blockchain-only platform that drew the CFTC’s enforcement action in 2022.

“Now, with the acquisition of QCEX, we are laying the foundation to bring Polymarket home — re-entering the US as a fully regulated and compliant platform.”
— Shayne Coplan, Polymarket CEO

The strategic context matters: Polymarket maintained its NYC headquarters even while blocked from US users, and DOJ/CFTC investigations into whether the platform continued serving Americans were dropped in July 2025 under the Trump administration’s “forward-looking” approach to prediction markets.

The $2 Billion Stamp of Approval

In October 2025, Intercontinental Exchange (NYSE: ICE)—the parent company of the New York Stock Exchange—led a $2 billion investment round in Polymarket at an $8 billion pre-money valuation, bringing the total to $9 billion. This is the largest investment in a prediction market platform ever made, and it represents something more significant than capital: institutional legitimacy.

ICE operates the infrastructure that underpins global financial markets. Its investment signals that “information finance”—the idea that prediction markets are a new asset class alongside equities, bonds, and commodities—has graduated from crypto-native speculation to institutional conviction.

The downstream effects are already visible. Institutional market makers like Susquehanna International Group now support Polymarket’s order books. Some traders are reportedly placing $10 million+ positions on macroeconomic outcomes. And Polymarket’s cumulative volume soared to $33.4 billion through December 2025—a figure that positions it to challenge not just other prediction markets but traditional derivatives exchanges.

The Insider Trading Cloud: The Maduro Trade

The most damaging story around Polymarket’s US return isn’t regulatory—it’s about trust. On January 3, 2026, the US military captured Venezuelan President Nicolas Maduro in what was codenamed “Operation Absolute Resolve.” Hours before the public announcement, Polymarket saw trading activity that defied coincidence.

Blockchain analysis shows the “Burdensome-Mix” account pushed the “Maduro exits” market from 8% to 22% in under three hours during the evening of January 2. By 2:58 AM on January 3—while the military operation was reportedly underway—the trader had concentrated $20,000 into “Yes” shares. Polymarket itself began offering a “Maduro in US custody by Jan 31” contract at 3 AM, roughly 90 minutes before Trump’s official announcement.

This isn’t the first time Polymarket has faced insider trading allegations—a previous investigation exposed wallet addresses with 100% win rates on Israel-Iran conflict bets. But the Maduro incident has triggered a far more significant response.

The Congressional Response

On January 11, 2026, twelve US Senators sent a letter to CFTC Chair Michael Selig demanding answers by February 9. The senators—including Adam Schiff, Alex Padilla, Catherine Cortez Masto, Elissa Slotkin, Cory Booker, and Richard Blumenthal—posed pointed questions: How does the CFTC monitor suspicious trading in event contracts? Does Regulation 180.1 (fraud and manipulation rules) apply? Has the CFTC ever investigated an event contract for insider trading? Does it coordinate with state gaming regulators?

The senators’ letter explicitly cited the NBA prop bet scandal as an example of how legal sportsbooks catch fraud through integrity monitoring—arguing that prediction markets lack equivalent safeguards. Rep. Ritchie Torres (D-NY) went further, introducing H.R. 7004, the “Public Integrity in Financial Prediction Markets Act of 2026.” The bill would ban federal officials, political appointees, and congressional staff from trading on event contracts where they possess—or could reasonably obtain—material nonpublic information. Modeled after the 2012 STOCK Act, the bill has attracted over 30 co-sponsors including former Speaker Nancy Pelosi.

Meanwhile, the CFTC and DOJ have reportedly opened a joint inquiry into the “Burdensome-Mix” wallet, with blockchain analysis firms tracking the $436,000 payout to mainstream US exchanges. The identity of the trader may be uncovered through subpoenas—the account was funded directly from Coinbase without anonymization.

The State-Level War

While the insider trading investigation plays out at the federal level, a parallel battle is unfolding across state lines. The core legal question: Does CFTC jurisdiction over derivatives preempt state gambling laws? The answer will determine whether prediction markets can legally operate nationwide.

Nevada’s case is particularly significant. On January 16, 2026, the Nevada Gaming Control Board filed a civil enforcement action in Carson City District Court against Blockratize Inc. (d/b/a Polymarket), QCX LLC (d/b/a Polymarket US), and Adventure One QSS Inc. The Board argues that offering sports event contracts—or “certain other event contracts”—constitutes wagering activity requiring a Nevada gaming license. The NGCB is leveraging a November 2025 ruling by Judge Andrew Gordon who found that sports event contracts are “substantively indistinguishable from sports wagering.”

Tennessee’s enforcement actions came a week earlier, with the Sports Wagering Council issuing cease-and-desist orders on January 9 demanding platforms stop offering sports contracts, void existing positions, and refund customers by January 31. Kalshi secured a temporary restraining order in federal court, but the legal battle continues. In Massachusetts, the ruling against Kalshi established what observers call the “coexistence doctrine”—the principle that state gambling regulation and federal CFTC oversight can function together without conflict.

The broader pattern is clear: 38 states plus DC have filed a joint amicus brief in Maryland vs. Kalshi arguing that sports event contracts are “functionally indistinguishable” from sports wagering. Whether federal preemption ultimately wins out in the courts will determine the geographic reach of every prediction market operating in the US.

Polymarket vs. Kalshi: The Competitive Landscape

Polymarket isn’t returning to an empty market. The prediction market industry has exploded during its absence, with Kalshi seizing the regulated US throne through an aggressive sports-first strategy and a landmark $1 billion Series E at an $11 billion valuation in December 2025.

As of early January 2026, Kalshi commands approximately 66% of total regulated US prediction market volume—driven overwhelmingly by sports contracts. In the first week of January, 91% of Kalshi’s total volume was concentrated in sports markets, transforming it from a niche intellectual tool into a high-frequency trading platform. Polymarket, by contrast, is positioning itself as the “Bloomberg of Truth,” focusing on geopolitical risk and macroeconomic indicators rather than competing directly on sports.

However, Polymarket maintains the lead in open interest (41.1% vs. Kalshi’s 38.1%), suggesting deeper liquidity on its longer-duration contracts. And on prediction markets themselves, Polymarket holds 47% odds of finishing 2026 as the volume leader, compared to Kalshi’s 34%.

The Robinhood Wildcard

The most disruptive variable in this competitive landscape isn’t Polymarket or Kalshi—it’s Robinhood. On January 21, 2026, Robinhood completed its acquisition of 90% of MIAXdx (a CFTC-licensed exchange and clearinghouse) through a joint venture with Susquehanna International Group. Prediction markets have become Robinhood’s fastest-growing product line by revenue, with 9 billion contracts traded by over 1 million customers in its first year.

The critical detail: public filings showed more than 50% of Kalshi’s volume came from Robinhood users. Now Robinhood is bringing that flow in-house—owning the DCM, the DCO, and the customer relationship instead of paying Kalshi for access. If Robinhood fully redirects its user base to its own exchange, Kalshi’s dominant position could shift overnight.

What US Users Can Actually Do Now

For all the regulatory drama, the practical question remains: what can Americans actually trade on Polymarket today?

The Timeline: From Outlaw to NYSE-Backed Exchange

What This Means for Bettors

Polymarket’s US return reshapes the landscape for anyone interested in prediction markets, event contracts, or the broader intersection of finance and forecasting. Understanding the expected value of prediction market positions is essential before trading, and the emergence of multiple regulated platforms creates potential arbitrage opportunities between exchanges.

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Sources

• Rep. Ritchie Torres Introduces Legislation to Crack Down on Insider Trading on Prediction Markets — U.S. House of Representatives
• NGCB Files Civil Enforcement Action Against Polymarket — Nevada Gaming Control Board
• Robinhood Extends its Prediction Markets Offering through New Joint Venture — Robinhood Newsroom