The prediction market company, Polymarket, is to exclude use of VPNs on its platform, according to reports, in an effort to clamp down on users bypassing local and national restrictions.
The platform is restricted in 33 countries and several regions due to local regulations and sanctions, and the measures aim to prevent users from bypassing those restrictions via VPNs.
VPN targeting marks new era for prediction market sector
Polymarket has begun blocking known VPN IP ranges and increasing identity checks for certain users, marking a significant shift for a platform that was built around pseudonymous blockchain-based trading. Users with large positions or rapid high-value activity may now face automatic verification requests, while others are being encouraged to submit Know Your Customer documentation voluntarily.
The changes represent a departure from Polymarket’s original model, which largely avoided identity checks and relied on minimal geofencing outside a U.S. restriction imposed under its 2022 settlement with the Commodity Futures Trading Commission (CFTC). The company says the measures are intended to strengthen enforcement of geographic restrictions already in place.
Polymarket is currently unavailable in 33 countries and regions, and the VPN crackdown is designed to prevent users from circumventing those bans. The move also comes as the House Oversight Committee has given the company until June 5 to provide information on its KYC procedures, geoblocking systems and methods for detecting suspicious trading activity.
The policy shift highlights a broader tension between Polymarket’s international platform and its U.S.-regulated operations. While founder Shayne Coplan has previously argued that insider information can improve market accuracy, U.S. regulatory frameworks treat insider trading as a potential enforcement issue. The new compliance measures suggest Polymarket is moving its international platform closer to U.S. standards as regulatory scrutiny intensifies.
Polymarket coming under increasing legal pressures
The reported changes come as governments in several countries increase scrutiny of tools that allow users to bypass online restrictions. In the United States, Utah has passed legislation targeting the use of VPNs to evade age-verification requirements on certain adult websites. In the United Kingdom, lawmakers have also examined potential new measures after VPN adoption surged following the rollout of stricter online age-check rules.
The larger debate reflects growing efforts by regulators to enforce digital policies tied to geography, age verification and consumer protections. While VPN providers argue their services play an important role in online privacy and security, officials in multiple jurisdictions have expressed concern that the technology can undermine laws designed to restrict access to certain content or services.
Prediction markets are facing similar legal pressures. Platforms including Polymarket and rival Kalshi have drawn scrutiny from regulators and state officials over whether their contracts constitute financial instruments or illegal gambling products.
Last month, Minnesota became the first state to approve legislation aimed at banning prediction market platforms, while several other states have pursued legal action alleging the companies are offering unauthorized wagering services. The disputes highlight the uncertain regulatory environment confronting an industry seeking broader acceptance in the U.S.
Polymarket completes first block trade in push toward institutional adoption
Meanwhile, Polymarket has completed its first block trade, a six-figure transaction tied to artificial intelligence computing infrastructure. The trade was executed between digital asset brokerage FalconX and trading technology startup Anera Labs on a contract linked to the Ornn Compute Price Index, which tracks rental pricing for Nvidia H100 graphics processing units.
Block trades are large privately negotiated transactions typically conducted outside public markets to minimize price disruption. Polymarket said the deal demonstrates how prediction markets can be used by institutional participants to hedge exposure to real-world assets, including AI compute resources.
The transaction comes just over a month after rival prediction market operator Kalshi announced the first block trade on a prediction market platform. Polymarket said its deal was the first institutional prediction market block trade conducted on-chain through its international platform, which operates on the Polygon blockchain.
Prediction market companies are increasingly targeting institutional traders as a new source of growth after a surge in retail activity over the past year. Polymarket said FalconX will serve as a dedicated market maker for future block trades, while both companies described the deal as a step toward improving liquidity and price discovery in emerging compute markets.
