Polymarket Gains CFTC Approval as Bank of America Flags Credit-Fueled Prediction Market Risks

Regulated Market Entry Meets Rising Concerns Over Retail Leverage

TL;DR

• Polymarket secures CFTC approval to re-enter the U.S. through regulated intermediaries after acquiring QCEX for roughly $112 million.
• User activity surges past 1.3 million traders and more than $18 billion volume, while valuation talks reportedly reach up to $12 billion.
• Bank of America warns of “credit-fueled gambling” as prediction markets expand, underscoring systemic risks despite institutional interest.

Polymarket’s long-anticipated return to the United States has taken a decisive step forward after receiving formal Commodity Futures Trading Commission clearance on November 25, 2025, enabling the platform to operate through regulated brokerages and futures commission merchants. The approval signals the first time an on-chain prediction market has been integrated into a federally supervised framework of this structure, allowing U.S. customers to participate under the oversight normally reserved for traditional derivatives venues. 

The company spent months upgrading surveillance systems, reporting tools, and internal risk controls to meet regulatory standards, marking a dramatic pivot from its earlier enforcement run-ins that resulted in a U.S. ban and a $1.4 million penalty. Polymarket CEO Shayne Coplan described the agency’s engagement as “impressive work,” noting the approval was completed in “record timing,” while the move positions the company to unlock institutional liquidity previously blocked from touching the platform.

A strategic acquisition underpins the re-entry. Polymarket purchased U.S.-licensed derivatives exchange and clearinghouse QCEX for about $112 million, a deal that laid the regulatory foundation for intermediated access and gave the company a compliant operational base. This expansion comes amid rapid platform growth. Monthly cumulative activity as of September reached roughly $17 billion in volume, while overall historical volume exceeded $18 billion. Trader counts surpassed 1.3 million with daily active users rising from about 20,000 to nearly 58,000 over recent months, illustrating a shift from niche speculation to mainstream participation. 

Private valuation discussions reportedly target as high as $12 billion, further amplified by an earlier investment arrangement valuing the firm around $8 billion through a stake purchased by Intercontinental Exchange. These metrics have fueled speculation that prediction markets could emerge as a new financial category rivaling traditional polling and, as some analysts quoted in recent coverage claim, potentially “bigger than the stock market one day” if institutional flows deepen.

Momentum has not overshadowed the warnings. Bank of America issued a pointed caution on November 25, outlining growing concerns that prediction markets may accelerate credit-driven speculative behavior as access widens, especially if user borrowing becomes intertwined with high-frequency event wagering. The bank’s assessment described a mounting risk of “credit-fueled gambling,” arguing that the blend of prediction markets and easy access to borrowed funds could mirror gambling dynamics rather than hedging or data-driven forecasting. 

The tension between rapid institutionalization and emerging consumer-risk alarms reflects a sector standing at a pivot point. Polymarket’s CFTC green light marks a turning point for regulated on-chain forecasting markets, though the same expansion is prompting scrutiny over leverage, retail exposure, and the blurred line between financial product and entertainment-driven speculation.

This article has been refined and enhanced by ChatGPT.