Coinbase Warns Customers of U.S. Regulator Demand for Polymarket User Data

Coinbase Inc. (COIN) is warning some customers that a U.S. regulator is demanding information about their interactions with prediction market firm Polymarket, according to a person familiar with the situation, and the cryptocurrency exchange is sending messages to customers saying Coinbase may have to share that data.

Those warnings about the Commodity Futures Trading Commission (CFTC) requests are accurate, said the person, who asked not to be identified discussing private matters. Copies of the emails shared with some customers have circulated on social-media sites.

The U.S. derivatives regulator has conducted a drawn-out legal battle with prediction markets firms, and this latest move comes just days before the leadership of the agency will flip from Democratic to Republican when President-elect Donald Trump takes office.

A Polymarket spokesperson declined to comment on the CFTC's efforts to gather customer information from Coinbase. Neither the CFTC nor Coinbase immediately responded to a request for comment.

On Jan. 20, Trump will reclaim the White House, and he'll be able to appoint a new chairman to replace Rostin Behnam, who has led the CFTC during its lengthy legal dispute with the prediction businesses. The sitting Republican commissioners, Caroline Pham and Summer Mersinger have drawn attention as potential candidates for the open chairmanship, as has former Commissioner Brian Quintenz.

The CFTC lost an initial case against prediction market firm Kalshi when a U.S. federal judge ruled late last year that the agency couldn't bar the company from listing election contracts. However, the regulator quickly filed an appeal with a higher court, and Polymarket argued in that new legal clash that only Congress can halt election betting.