Polymarket CEO calls the search in his apartment revenge for Trump’s victory

What’s new? FBI agents searched the CEO of Polymarket, the largest decentralized crypto prediction market, Shayne Coplan. According to The New York Post’s source, the 26-year-old entrepreneur’s apartment in Manhattan’s SoHo neighborhood was raided at 6 a.m. on November 13 and his phone and other electronic devices were seized.

Material by New York Post

What else is known? Coplan himself announced the purchase of a new phone on his X-account after the search. He later noted that Polymarket has benefited tens of millions of people this election cycle without hurting anyone, something his team is very proud of.

At the same time, he also criticized the Democratic Party:

“It’s discouraging that the current administration would seek a last-ditch effort to go after companies they deem to be associated with political opponents.

We are deeply committed to being non-partisan, and today is no different, but the incumbents should do some self-reflecting and recognize that taking a more pro-business, pro-startup approach may be what would have changed their fate this election.”

Finally, Coplan expressed confidence that the company will persevere despite the challenges and that a positive outlook awaits American entrepreneurs in general: “the future of America, and in particular American entrepreneurship, has never been brighter.”

Source: X.com

The publication’s anonymous source also believes that the prosecution is politically motivated, as Polymarket predicted Donald Trump’s victory in the presidential election quite accurately with a clear lead, unlike traditional polls.

Coplan was not given a reason for the raid, with the raid taking place a week after the votes were counted, and the businessman announced that Polymarket plans to return to the United States.

The publication’s source also suggests that the authorities may have used liberal media reports that Polymarket falsified predictions in favor of Trump through market manipulation as a pretext.

“This is obvious political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election,” the source said.

Just before the election, Polymarket users estimated Trump’s likelihood of winning at 58,6%, with Harris at 41,4%.

In the context of the sudden search, it is also important to note that Polymarket’s main investor Peter Thiel is a Trump supporter, and Shayne Coplan himself has been seen in the company of Donald Trump Jr.

Polymarket was launched in 2020 on the Polygon Layer 2 (L2) network based on the Ethereum blockchain, backed by Peter Thiel’s Founders Fund. The team raised a total of $74 million, with Ethereum co-founder Vitalik Buterin as one of the investors.

The platform allows users to buy “shares” in the outcome of political and sporting events or predict the prices of financial assets and receive one USDC stablecoin per share if the prediction comes true. The value of one share is determined by the ratio of previous bets made. For example, when users estimated the probabilities of Trump and Kamala Harris winning at 65% and 35%, respectively, a share for Trump was worth $0,65 and $0,35 for Harris, and vice versa with “against” stocks.

Last week, media reported that France’s National Gambling Authority (ANJ) would close access to Polymarket to local users because the platform was operating without a license. It caught the regulator’s attention after a large French trader known under the nickname Teo won $85 million on Trump’s victory by betting large sums through different accounts.

Polymarket’s team also previously conducted an internal investigation to uncover manipulation and restrict access to US clients. The platform paid a $1,4 million fine and stopped serving clients in the States in 2022 under pressure from the Commodity Futures Trading Commission (CFTC), but retained its headquarters in New York. That said, local users can easily bypass the ban with a VPN.

In the run-up to the election, the popularity of the platform increased significantly, and the predictions of its users were often cited in articles by major media outlets, including CNN. In turn, Bloomberg integrated Polymarket into its Bloomberg Terminal aggregator. At the time, Coplan noted, “10s of millions of people build habit around relying on Polymarket forecasts as a source of truth, to make sense of what’s going on in the world.”

Less than a week before the election, analysts of Chaos Labs and Inca Digital independently of each other came to the conclusion that fictitious trading takes place on Polymarket and its share is about 30%. Fictitious trading is carried out to artificially inflate the trading volume. However, the reports admit that the inflated figures are the result of a flawed betting algorithm by the platform itself and not intentional fraud.

As for Coplan, he was not arrested or charged after the search, as reported by a Polymarket spokesperson. He also added:

“Polymarket is a fully transparent prediction market that helps everyday people better understand the events that matter most to them, including elections. We charge no fees, take no trading positions, and allow observers from around the world to analyze all market data as a public good.”