The 2024 US presidential race is heating up, and with it, a new wave of political betting is emerging in the crypto world. Platforms like Polymarket, Kalshi, and PredictIt are seeing a surge in bets on election outcomes, even though US regulators are trying to crack down on this activity.
Polymarket: The Crypto Betting Hotspot
Polymarket, a decentralized finance (DeFi) platform, is at the heart of this trend. It allows users to bet on all sorts of things, from election winners to the possibility of aliens revealing themselves.
According to a recent report, the amount of bets on Polymarket related to the US election has exploded in recent months, reaching almost $1 billion. This surge is partly due to high-profile events like President Biden dropping out of the race and the assassination attempt on former President Trump.
The Catch: Blocking US Users
Despite claiming to have blocked US-based users since 2022, Polymarket’s system for doing so is apparently easy to bypass using VPNs. Social media is even filled with instructions on how to access the platform from the US. Some traders have openly discussed their Polymarket activities online, ignoring the platform’s restrictions.
Regulators Sound the Alarm
This situation has raised concerns for US regulators, who are worried about the integrity of elections. The CFTC, the agency responsible for regulating futures trading, has warned that these types of bets could undermine the democratic process.
They’ve even touted a settlement with Polymarket as proof that all derivatives markets, regardless of technology, must operate within the law. However, legal experts argue that the CFTC hasn’t provided clear guidance on how DeFi platforms can effectively block US users.
The Future of Election Betting
Crypto champions like former President Trump have already shared Polymarket’s odds on his chances of winning the 2024 election, with the platform suggesting a 55% chance.
The CFTC chairman has warned that these election-related contracts could ultimately harm the integrity of US elections.
It remains to be seen how the US government will regulate crypto betting on elections. But one thing is clear: the crypto world is changing the way we think about political betting.
