Author: Bao Yilong, Wall Street Insight
Original Title: Acquiring a Licensed Exchange, "World's Largest Online Prediction Market" Polymarket Returns to the United States
Just days after federal regulators withdrew their investigation, Polymarket, one of the world's largest prediction market platforms, quickly took action by acquiring a US-licensed exchange, paving the way for its return to the critical US market.
On July 21, Polymarket announced the acquisition of QCX, a derivatives exchange in Florida, and its affiliated clearing house QC Clearing (collectively known as QCEX), for $112 million. Polymarket's founder and CEO Shayne Coplan stated that this acquisition is a significant step towards expanding into the US market and will provide critical infrastructure for the platform's compliant operations in the United States.
This move is of great significance for Polymarket. Although the platform is globally popular and has attracted around $6 billion in trading volume so far this year, it has been closed to US users since 2022. By acquiring QCEX, Polymarket obtains a regulated entity that can provide contract trading within the United States, offering a compliant pathway to extend its large global user base to the US market.
The timing of this transaction is particularly noteworthy. Just a few days ago, the US Department of Justice and the Commodity Futures Trading Commission (CFTC) had just concluded an investigation into Polymarket. The investigation, launched in November after Trump's election, aimed to determine whether the platform facilitated trading for US users. The termination of the investigation is seen as a key prerequisite for Polymarket's strategic positioning in the US market.
Acquiring QCX to Obtain US Operating License
Acquiring QCEX is the core strategy for Polymarket's return to the US market. US regulators have clearly stated that prediction markets are allowed to operate only on licensed platforms. QCEX precisely provides Polymarket with this crucial compliance license.
Based in Boca Raton, Florida, QCEX is an emerging regulated exchange that first submitted its license application to the CFTC in June 2022 and officially received its contract market operating permit in early July this year.
This means Polymarket is acquiring a brand new, clean licensed entity that can be directly used to deploy its business. Coplan added on Monday:
The acquisition lays the foundation for bringing Polymarket home—returning to the US as a fully regulated and compliant platform, allowing Americans to trade their perspectives.
Regarding this collaboration, QCEX founder Sergei Dobrovolskii stated:
Coplan has created a cultural phenomenon with Polymarket. I am pleased to merge our companies and use our license, technology, and expertise in retail trading to help Polymarket fully realize its potential.
It is worth noting that Polymarket announced a partnership with Musk's X platform in June this year, stating that X's Grok chatbot will provide users with "contextualized, data-driven insights".
US Policy Environment Becoming More Friendly
Prior to this acquisition, Polymarket had just emerged from significant regulatory uncertainty.
Polymarket was extremely popular before the US presidential election in November last year, attracting billions of dollars in trading volume. The company states that global users have made approximately $6 billion in predictive trades on political developments, pop culture events, and sports events so far this year.
However, in the days following Trump's election, the Department of Justice and CFTC launched an investigation into the platform, focusing on whether it provided gambling services to people within the United States. As part of the investigation, the FBI raided Coplan's residence in November. But Coplan publicly stated this month that the investigation has concluded.
This outcome cleared legal obstacles for the company's next expansion and directly prompted Polymarket's rapid acquisition of QCEX.
In fact, the Trump administration showed a more open attitude towards prediction market betting. Brian Quintenz, nominated by Trump to chair the CFTC, previously served on the board of Polymarket's competitor Kalshi, while Donald Trump Jr. serves as an advisor to Kalshi.
Additionally, Kalshi won a court ruling last year allowing users to bet on prediction outcomes, which was seen as an important victory for the industry.
