Polymarket has acquired a little-known exchange registered with the Commodity Futures Trading Commission (CFTC) in a deal that the prediction market says will “pave the way for U.S. users to access Polymarket in the near future.”
According to a press release, the prediction market has closed a deal to buy QCEX, which received CFTC approval to operate earlier this month, for $112 million. The CFTC registration, rather than any aspects of QCEX’s operations or team, appears to be the motivation for the purchase, as it would allow Polymarket to legally offer its services in the U.S.
Obtaining CFTC approval the traditional way can be a long and ardous process; QCEX applied for the status in 2022.
Shayne Coplan, founder and CEO of Polymarket, specifically highlighted the fact that the deal could allow the exchange to offer its services in the U.S. legally.
“Polymarket is the largest prediction market globally and has become synonymous with understanding the probability of current events,” Coplan said in a statement. “Demand is greater than ever — not just in user growth and trading volume, but in how mainstream audiences are turning to Polymarket to separate signal from noise, bias, and speculation. Now, with the acquisition of QCEX, we are laying the foundation to bring Polymarket home — re-entering the U.S. as a fully regulated and compliant platform that will allow Americans to trade their opinions.”
Currently lacking CFTC approval, Polymarket is not permitted to accept U.S. customers. Last year, the Department of Justice launched an investigstion into the company, examining whether it was continuing to take business from the U.S. However, that probe was dropped last week in a move that appeared to open the door to Polymarket obtaining U.S. regulatory approval.
Although the probe was dropped, questions remain on whether Polymarket continues to accept American customers without approval. A report from Sportico last week found that Polymarket spent more than $1 million on Facebook and Instagram ads targeting U.S. customers.
The arrival of Polymarket into the regulated prediction market space would likely lead to a major battle for market share with Kalshi, which is already approved by the CFTC. While other registered prediction markets exist, only Kalshi has gained a significant foothold. The importance of liquidity – having a counterparty that will always be willing to buy or sell a contract at market price – in exchange betting can naturally lend itself to a winner-takes-all structure.
Polymarket is the largest prediction market globally. According to Polymarket Analytics, which is not affiliated with the exchange, total trading volume on active markets on the site comes to $619.5 million, more than four times as much as on Kalshi.
Like Kalshi, Polymarket offers event contracts on non-sporting events such as politics and sports event contracts, which has proven to be controversial as many states have argued they are an illegal form of sports betting.
If Polymarket obtains CFTC approval, it may need to make some changes to its offering. For example, it offers futures on films’ box office gross, which is not permitted by the CFTC and not offered by registered exchanges like Kalshi.
