JPMorgan Debanked Polymarket Over US Regulatory Concerns

JPMorgan Allegedly Debanked Polymarket Over Regulatory Concerns

JPMorgan, one of the largest investment banks, was involved in the financial services denial epidemic, known as “debanking,” that affected several cryptocurrency-focused companies and individuals.

According to reports from the Financial Times, JPMorgan would have severed its banking relationship with the prediction market platform in October, citing regulatory concerns.

While Polymarket was allowed to offer its services in the U.S., at the time of the de-banking event, the company could not offer its event markets to U.S. citizens after a Commodity Futures Trading Commission (CFTC) enforcement action for operating as an unregistered derivatives trading platform.

Nonetheless, the bank has not cut all its ties with Polymarket, as it might be the company’s underwriter when it goes public. While it is currently in talks to raise more capital, it has not yet announced a date for an upcoming initial public offering (IPO).

Polymarket stressed that it continues to have links with the bank “across multiple entities, operational integrations and material handling of customer fund flows. Any suggestion otherwise fundamentally mischaracterises our relationship,” Polymarket declared.

Polymarket’s last valuation rose to $15 billion after an unreported $1 billion funding round led by Intercontinental Exchange (ICE) in April, and an IPO could boost this number exponentially.

De-banking, defined as the denial of financial services to customers due to their political affiliation, or in the case of crypto institutions, their involvement with digital assets, has become a major issue during the Trump Administration.

The president himself has accused JPMorgan of debanking him after the January 6 incident and is seeking at least $5 billion in damages.

Nine U.S. banks, including JPMorgan, have been implicated in these practices according to a preliminary report of the Office of the Comptroller of the Currency (OCC) published in December.

Sectors subjected to restricted access included digital assets and other industries, such as oil and gas exploration, coal mining, and firearms.

In June, the U.S. Department of Justice sent subpoenas to these banks requesting information evidencing debanking processes, amidst a sector-wide investigation led by U.S. Attorney for the District of Columbia Jeanine Pirro.