Report: Polymarket Pushes KYC on Crypto Traders as Geoblocking Gaps Draw Global Scrutiny

Polymarket Cracks Down on Non-KYC Users

The Information’s Michael Roddan reports that the platform is blocking suspicious accounts and cracking down on VPN usage, which traders in restricted jurisdictions have long used to sidestep geoblocking controls. Users who complete know-your-customer, or KYC, forms may gain access to perks such as direct co-location for reduced trading latency.

Polymarket operates on a dual structure. Its offshore international platform has historically offered wallet-based access, a setup that drove billions in trading volume during the 2024 U.S. elections. Its domestic arm, Polymarket US, is operated by QCX LLC under CFTC oversight as a Designated Contract Market and already requires full identity verification for American users.

The gap between those two tiers is what regulators and lawmakers are now focused on.

The platform currently blocks users from roughly 33 to 35 jurisdictions, including the U.S., Russia, France, the United Kingdom, Germany, Iran, and the Netherlands. Its terms of service explicitly prohibit VPNs or other tools from bypassing those restrictions. Despite that, it is believed that cheap VPN access has made geoblocking porous, leaving Polymarket exposed to potential OFAC sanctions violations and anti-money laundering failures.

This month, Spain ordered internet service providers to block access to Polymarket over unlicensed gambling concerns. Similar actions have taken place in Indonesia and India. A U.S. House oversight letter, also submitted this month, asked Polymarket to detail its KYC enforcement, geoblocking controls, and systems for detecting suspicious trading activity.

High-profile cases have compounded the pressure. U.S. Army soldier Gannon Ken Van Dyke faces allegations of using classified information to place trades on Polymarket, a case that spotlights the legal exposure that anonymous access creates. Suspected coordinated trading on military and geopolitical events has drawn additional scrutiny from researchers and regulators.

Polymarket published enhanced market integrity rules in March 2026, covering both platforms. Those rules include surveillance partnerships, anomaly detection systems, and blockchain forensics through Chainalysis. Violations can result in account suspension, permanent bans, financial penalties, or referrals to law enforcement.

For traders who prefer pseudonymous access, the shift adds friction. For Polymarket, it is a calculated move to reduce regulatory exposure while preserving the platform’s ability to operate, attract institutional partnerships, and maintain its relationship with investors, including the parent company of the New York Stock Exchange (NYSE).

The broader prediction market sector, including competitors like Kalshi, is watching closely. KYC requirements and real-time surveillance are increasingly becoming minimum requirements for platforms that want to operate long-term in regulated markets.

Polymarket has cooperated with authorities in select cases and has publicly emphasized its monitoring capabilities. The platform has not specified a hard deadline for when identity verification will become mandatory across its international user base. That answer may come from regulators before it comes from Polymarket.

But the real question is which regulators are actually in control. This year, state regulators have been clashing with federal authorities in the U.S., particularly the CFTC. Just yesterday, President Donald Trump posted on Truth Social, arguing that prediction markets fall under the CFTC’s jurisdiction, even as state regulators continue filing lawsuits against prediction market platforms and issuing cease-and-desist orders.