Polymarket Is Negotiating with U.S. Regulators to Bring Its Main Exchange Back Onshore
Polymarket is in active talks with the Commodity Futures Trading Commission to lift the ban on U.S. users accessing its primary on-chain prediction market, Bloomberg reported on April 28. The move would effectively reverse the offshore arrangement the platform has operated under since a 2022 regulatory settlement, and its outcome will have direct consequences for traders far beyond American borders.
The company currently runs two separate products. Its main exchange, built on the Polygon blockchain and accessible in more than 160 countries, remains geo-blocked for U.S. users. A parallel U.S.-only platform, obtained through the $112 million acquisition of CFTC-licensed derivatives exchange QCEX LLC (doing business as Polymarket US), received Designated Contract Market status from the CFTC in November 2025 but has not fully launched.
What Polymarket is now seeking is permission for U.S. traders to access the same primary on-chain exchange used by the rest of the world, rather than routing them through a separate brokerage-style interface. Polymarket declined to comment on the Bloomberg reporting.
The 2022 Settlement and What Came After
Polymarket's exclusion of U.S. users traces to a January 2022 CFTC enforcement action against Blockratize Inc., which operated as Polymarket, for running event-based binary options contracts without the required regulatory designation. As part of the settlement, the company paid a $1.4 million civil penalty, agreed to geo-block American traders, and wound down non-compliant markets. It subsequently shifted its primary operations offshore.
The regulatory climate has since shifted considerably. In July 2025, both the DOJ and CFTC closed investigations into Polymarket without bringing new charges. CFTC Chairman Brian Selig has since withdrawn a proposed rule that would have banned political and sports event contracts, pulled back a 2025 advisory cautioning participants about state-level litigation risk, and published an advance notice of proposed rulemaking in February 2026 aimed at establishing clearer standards for event contracts. In April 2026, the agency filed simultaneous federal complaints in Illinois, Connecticut, and Arizona to assert exclusive federal jurisdiction over prediction markets, preempting state gambling regulators.
Selig has stated flatly that "states do not have the ability" to police federally regulated prediction market platforms, according to CoinDesk.
The procedural path for any vote is unusual. Four of the five CFTC commissioner seats are currently vacant, leaving Selig as the sole sitting commissioner. That concentration of authority may make a formal vote on lifting the Polymarket restriction more straightforward than it would normally be.
The Van Dyke Case as Catalyst
The talks come weeks after the arrest of U.S. Army Special Forces Master Sergeant Gannon Ken Van Dyke, charged with using a VPN to circumvent Polymarket's geo-block and trading contracts tied to Venezuelan President Nicolas Maduro using classified military intelligence.
Van Dyke allegedly turned a $34,000 initial stake into more than $400,000 in profits.
He faces charges including commodities fraud, wire fraud, theft of government information, and unlawful monetary transactions.
The case put the practical limits of Polymarket's current U.S.-exclusion framework in direct view of federal prosecutors, and the timing suggests it may have sharpened regulatory attention on the question of onshoring.
Volume Context and the Double-Counting Caveat
Polymarket processed roughly $7 billion in reported monthly volume in January 2026, while rival Kalshi set a record of $6.38 billion in December 2025. Together, the two platforms account for approximately 97.5 percent of global prediction market volume.
Those figures should be read with some caution. A December 2025 analysis by Paradigm, a crypto-focused investment firm, concluded that Polymarket's volume numbers are likely inflated by double-counting, due to how order-filled events are tracked on-chain. Data aggregators including DefiLlama were updating their methodologies in response. The platform nonetheless commands roughly 840,000 unique wallets per month as of February 2026, a metric less susceptible to that accounting issue.
Polymarket's institutional standing has also changed substantially. Intercontinental Exchange, the parent of the New York Stock Exchange, committed up to $2 billion in Polymarket at an approximate $9 billion valuation in October 2025, completing a first tranche of $600 million in March 2026. ICE will distribute Polymarket's event-driven data as a financial information product, moving the platform into territory adjacent to Bloomberg Terminal-style data infrastructure.
The push to onshore its main exchange also reflects direct competitive pressure from Kalshi. U.S. users locked out of Polymarket's primary exchange are currently able to trade on Kalshi, which operates fully within U.S. regulatory frameworks. That arrangement gives Kalshi a structural advantage in capturing American retail and institutional volume that Polymarket's primary product cannot address, and the competitive cost of that exclusion has grown as both platforms scale.
What Onshoring Means for Users Outside the United States
For traders in South Asia, Africa, and other regions where Polymarket's main exchange is currently accessible, regulatory consolidation under CFTC oversight is not straightforwardly good news. The platform's existing international exchange operates without KYC requirements or bank account linkage, requiring only a crypto wallet and USDC stablecoin. If primary liquidity migrates to a U.S.-regulated structure with stricter onboarding, the international exchange risks becoming a thinner secondary market with worse pricing and shallower order books.
South African users reportedly access the main platform currently, and India is not among the geo-blocked countries.
Kenya is formally on Polymarket's geo-block list, though the on-chain nature of the contracts limits enforcement.
Nigeria presents a more complex picture. As Africa's largest crypto user base, Nigeria has significant exposure to any structural shift at Polymarket. A more regulated onshore structure, with KYC and AML requirements aligned to U.S. expectations, could impose meaningful friction on Nigerian users or exclude them outright. Although Nigeria was removed from the FATF grey list in February 2025, its history of heightened AML scrutiny means that tighter compliance requirements tied to expanded CFTC oversight could affect Nigerian access disproportionately. The Nigerian Securities and Exchange Commission and the Central Bank of Nigeria have maintained a cautious posture toward crypto platforms, adding a further layer of domestic regulatory uncertainty for users in that market.
Developers in Lagos, Nairobi, or Bangalore who are building interfaces or data products on top of Polymarket's infrastructure face a practical architecture question: a bifurcated API serving different contracts, settlement rails, or data feeds for U.S. versus international users would require rebuilding integrations.
What Comes Next
The outcome of the CFTC talks is not yet determined, and no timeline has been made public. The broader regulatory framework for event contracts remains in flux, with formal rulemaking expected to continue through 2026. For now, Polymarket sits in a structurally awkward position: backed by the parent of the New York Stock Exchange, valued at roughly $9 billion, and still formally blocked from its largest currently excluded market.