JPMorgan severed its links with Polymarket last year, citing regulatory concerns as the prediction market industry stood on shakier ground than it does today. The U.S. Department of Justice is currently probing major banks, including JPMorgan, for improperly closing customer accounts.
Key Takeaways
JPMorgan cut banking ties with Polymarket in October due to regulatory concerns over unregistered trading.Despite the debanking, Polymarket retains operational links with JPMorgan, which may underwrite its IPO.The DOJ is now investigating JPMorgan and eight other banks for politically motivated debanking practices.JPMorgan, one of the largest investment banks, was involved in the financial services denial epidemic, known as “debanking,” that affected several cryptocurrency-focused companies and individuals.
While Polymarket was allowed to offer its services in the U.S., at the time of the de-banking event, the company could not offer its event markets to U.S. citizens after a Commodity Futures Trading Commission (CFTC) enforcement action for operating as an unregistered derivatives trading platform.
Polymarket stressed that it continues to have links with the bank “across multiple entities, operational integrations and material handling of customer fund flows. Any suggestion otherwise fundamentally mischaracterises our relationship,” Polymarket declared.
Polymarket’s last valuation rose to $15 billion after an unreported $1 billion funding round led by Intercontinental Exchange (ICE) in April, and an IPO could boost this number exponentially.
De-banking, defined as the denial of financial services to customers due to their political affiliation, or in the case of crypto institutions, their involvement with digital assets, has become a major issue during the Trump Administration.
Sectors subjected to restricted access included digital assets and other industries, such as oil and gas exploration, coal mining, and firearms.
In June, the U.S. Department of Justice sent subpoenas to these banks requesting information evidencing debanking processes, amidst a sector-wide investigation led by U.S. Attorney for the District of Columbia Jeanine Pirro.
