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A rapidly expanding crypto betting platform is under the microscope due to its practice of channeling the majority of its operations through an offshore entity, enabling it to present wagers that would otherwise be prohibited in the U.S.
Polymarket, which has soared to a valuation exceeding $9 billion, offers users the chance to place bets on diverse topics ranging from political elections to potential arrests. Observers argue that its operational model is crucial in circumventing the stringent regulations applicable to American exchanges.
A significant 97% of Polymarket’s transactions are processed by an obscure Panamanian firm, Adventure One QSS Inc., effectively placing much of its business activity beyond U.S. regulatory reach.
This arrangement has fostered the emergence of numerous contentious markets, most recently including those linked to actual criminal events.
In one notable example, users staked over $188,000 on the likelihood of an arrest in the case of 84-year-old Nancy Guthrie’s disappearance, thus transforming an ongoing investigation into a speculative betting arena.
The example has fueled fresh concerns about how far these platforms can go when operating beyond US rules.
Under US law, platforms cannot allow wagers tied to events like war, terrorism, assassination or death. But those kinds of markets have appeared on Polymarket’s offshore site.
The company was founded in 2020 by US entrepreneur Shayne Coplan, then 22, who launched it during the pandemic as a way for users to bet on real-world events using cryptocurrency.
Polymarket, a crypto-based betting platform where users wager on real-world events, conducts the vast majority of its business – around 97 per cent by volume – through a little-known Panamanian company called Adventure One QSS Inc
Initially, Polymarket marketed itself as a more transparent alternative to traditional betting or forecasting, arguing that market prices reflect collective beliefs.
But as it grew, it also drew scrutiny from regulators, particularly in the US, because event-based contracts can fall under derivatives law.
That regulatory pressure led to a major turning point. In January 2022, the Commodity Futures Trading Commission (CFTC) fined Polymarket’s original US entity Blockratize Inc $1.4 million and ordered it to wind down unregistered markets.
Shortly after, the platform’s main activity shifted offshore to a Panama-incorporated entity, Adventure One, which now handles the vast majority of trading volume.
Only a small part of its business – roughly 3 percent – runs through a registered American entity that complies with oversight from the CFTC.
The Panama-based company, however, is not subject to those same requirements. That means it does not have to carry out identity checks, monitor trading in the same way, or restrict certain types of bets.
Despite this, company leadership remains closely tied to the founder Coplan and current president Harry Jones are both based in the United States, according to public records.
Under US rules, platforms cannot allow betting on events involving war, terrorism, assassination or death. Those restrictions stem from the Commodity Exchange Act, which governs financial derivatives markets.
The company – now valued at more than $9 billion – was founded by Shayne Coplan (pictured), a US-based entrepreneur, in 2020, when he was just 22 years old
Adventure One QSS Inc., incorporated in Panama in 2021, is not registered with US regulators and is not subject to the same rules governing American exchanges
Yet such markets have appeared on Polymarket’s offshore platform, alongside a wide range of geopolitical and other high-risk event contracts.
In January, an anonymous user turned a $32,000 bet into more than $400,000 by correctly betting Venezuelan president Nicolás Maduro would be captured. Most of the trades came just hours before the surprise US operation that removed him from power.
On another occasion, online sleuths spotted one anonymous account that correctly predicted nearly every outcome tied to the Super Bowl halftime show.
The structure Polymarket operates by also allows users to trade without providing personal information.
Unlike US-regulated exchanges, which require identity verification and sanctions screening, access to the offshore platform typically only requires a crypto wallet.
Critics argue this creates potential risks, including the possibility of trading by sanctioned individuals, minors, or bad actors using anonymous accounts.
Researchers have also raised concerns about trading activity on the platform.
A 2025 academic study out of Columbia Business School and Barnard College found that roughly a quarter of transactions showed patterns consistent with ‘wash trading’ – a practice where traders buy and sell to themselves to artificially inflate activity. On regulated exchanges, such behavior is banned and monitored through surveillance systems.
Separate analyses have flagged unusual trading patterns tied to major geopolitical events, with some accounts appearing to place highly accurate bets shortly before key developments.
Under US rules, platforms cannot allow betting on events involving war, terrorism, assassination or death. Those restrictions stem from the Commodity Exchange Act, which governs financial derivatives markets
While these findings do not prove wrongdoing, they have fueled debate about whether unregulated prediction markets are vulnerable to manipulation or insider advantage.
Regulators around the world have taken notice.
More than 15 jurisdictions – including the UK, France, Singapore and Canada’s Ontario province – have either blocked access to Polymarket or taken enforcement action against its offshore operations.
Authorities have cited concerns ranging from unlicensed gambling to lack of investor protections.
In the US, regulators previously fined Polymarket’s earlier operating entity and ordered it to shut down certain markets.
Shortly after, operations shifted to the Panama-based company.
The situation highlights a broader dilemma for regulators.
Demand for prediction markets – where users bet on everything from elections to economic indicators – continues to grow.
Last month, Intercontinental Exchange announced that it had invested $600 million in Polymarket, as the New York Stock Exchange parent expands into the fast-growing event-based trading segment.
Polymarket faced backlash for allowing users to profit from bets tied to the alleged kidnapping of the elderly mother of Today show host Savannah Guthrie
More than $188,000 was staked on whether an arrest would be made in the kidnapping case by February 28
The funding is part of the exchange operator’s previously announced plan to invest up to $2 billion in Polymarket, the company said.
But strict rules in the US limit what regulated platforms can offer.
As a result, some of that demand is moving offshore, where platforms face fewer restrictions but also less oversight.
Supporters argue prediction markets can provide valuable insights and crowd-sourced forecasting.
Critics counter that without proper safeguards, they risk enabling harmful or unethical betting activity.
Polymarket declined to comment to the Daily Mail.