The National Gambling Authority of France (ANJ) plans to block access to the cryptocurrency betting platform Polymarket. This decision follows record-breaking bets made during the U.S. presidential election.
ANJ Investigation Into Polymarket Activities
ANJ has launched a thorough investigation into Polymarket's activities in France following a significant surge in transaction volumes during the U.S. election period, where more than 3.5 billion dollars were traded. The platform allows users to bet on political events using cryptocurrencies without strict identity verification. The case of the French trader 'Théo', who made a historic gain of 47 million dollars by betting on Trump's victory, has drawn particular attention.
Regulatory Concerns
The record transaction by the French trader raises questions about the potential for market manipulation and insider trading. The French authority plans to block the platform's domain names and restrict its promotion in national media, although these measures could potentially be circumvented through the use of VPNs.
Challenges in Regulating Crypto Betting
The growing popularity of Polymarket poses a real dilemma for international regulators. Similarly, the U.S. Commodity Futures Trading Commission (CFTC) had already opened an investigation in 2021 into possible violations. The blockchain technology behind Polymarket complicates regulation, and potential decentralization through a future token could make the platform even more challenging to regulate. Some U.S. lawmakers, including Senators Elizabeth Warren and Richard Blumenthal, have highlighted the risk of such platforms influencing public opinion and election outcomes.
Regulators must find a balance between financial innovation and the protection of democratic processes as decentralized predictive markets continue to gain popularity.
