Polymarket Re-Enters US With $112M CFTC-Licensed Exchange Acquisition, Challenging Kalshi

Polymarket, the world’s largest prediction market by trading volume, is set to return to the US after acquiring QCEX, a derivatives exchange and clearinghouse licensed by the Commodity Futures Trading Commission (CFTC) for $112 million. The move provides Polymarket with a swift legal path to relaunch in the US after years of regulatory exile.

The announcement comes less than a week after the CFTC and Department of Justice (DOJ) dropped their investigation into Polymarket for allegedly accepting US users.

Once live, the exchange will contribute to a significant transformation and expansion of the US prediction market landscape. According to Polymarket, in the first half of 2025, users have made about $6 billion in predictions on its platform.

Why Wasn’t Polymarket in the US Before?

Polymarket operated in the US before 2022. That year, it exited the market after regulatory actions taken by the CFTC.

The commission fined the company $1.4 million for offering event-based binary option contracts to US users without obtaining a designation for a designated contract market (DCM) or registering as a swap execution facility (SEF).

As part of the settlement with CFTC, Polymarket agreed to cease operations in the US. However, ever since its exit, the prediction exchange has been under scrutiny amid rumours (which were clear to many) that it allowed US clients via VPN.

The CFTC and the DOJ opened an investigation. Notably, shortly after the 2024 US presidential election, the FBI raided CEO Shayne Coplan‘s New York residence. Although they didn’t arrest or charge him, his electronic devices were seized.

The CEO blamed the Biden administration for the highly publicized raid. Critics suggested it meant to punish the company, which predicted Trump would comfortably beat Harris.

As the Trump administration has taken a more friendly stance towards cryptocurrencies and prediction markets, the DOJ and CFTC have dropped their investigation into Polymarket.

However, that didn’t allow the platform to re-enter the country as it would need to go through the licensing process. That usually takes a few years.

The QCEX Acquisition: A New Beginning

QCEX is a combination of a DCM and a derivatives clearing organization, both of which are licensed by the CFTC. That provides Polymarket with a legal foundation to re-enter the US as a fully compliant platform.

Coplan emphasized the significance of the deal:

“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 US as a fully regulated and compliant platform that will allow Americans to trade their opinions.”

Acquiring a platform that already holds a CFTC license saves Polymarket several years of the licensing process. According to Sergei Dobrovolskii, Founder of QCEX, the company started the process of obtaining a license over four years ago. CFTC’s website states that the agency granted QCEX registration in December 2024, suggesting that the process took over three years.

While Polymarket has not stated an exact launch date, it is likely targeting the start of the football season in September. Like rival Kalshi, Polymarket offers sports event markets, which have rapidly become a significant part of its business. A fall launch would allow Polymarket to capitalize on the high interest during football season.

Once it launches, Polymarket will have an additional boost. It has recently partnered with Elon Musk and his social media platform, X. The partnership could significantly expand Polymarket’s reach.

Kalshi’s Legal Battles and the US Prediction Market Landscape

Polymarket’s imminent US re-entry comes as its rival and main CFTC-regulated competitor in the US, Kalshi, faces legal battles over its sports event markets.

Several states, including Nevada, New Jersey, Ohio, Illinois, Maryland, and Connecticut, have taken legal action against Kalshi. That includes cease-and-desist orders and ongoing investigations into whether the sport event contracts are a form of illegal gambling under their respective state laws.

Kalshi argues that it operates under federal jurisdiction and its contracts are financial instruments, not gambling products. The company initiated counter lawsuits, arguing that federal laws preempt state laws. It also contends that state regulators violate the Supremacy Clause in the US Constitution.

Kalshi has already secured some legal wins. In April, a federal court blocked New Jersey’s cease-and-desist order. A similar ruling has also been issued in Nevada.

The lawsuit in Maryland could play a pivotal role in the prediction market landscape. Judge Ableson, who is overseeing the case, questioned Kalshi’s change in stance regarding sports event contracts.

In the case, the company argues that sports markets have real financial consequences and are therefore covered by the Commodity Exchange Act. However, in an earlier case against the CFTC, it claimed that they have no value. That means they do not fall under federal oversight.

However, despite facing legal challenges, Kalshi continues to grow rapidly. Sports event contracts now account for the majority of its business, and the company recently announced that it had surpassed $2 billion in sports trading volume in less than six months after launching these markets.

Recent funding further underscores Kalshi’s rapid growth, valuing the platform at $2 billion — nearly double the valuation of Polymarket following its most recent financing round.