USDSpain, Indonesia Block Prediction Markets
Hyperliquid expands event trading as regulators scrutinize Polymarket and Kalshi
TL;DR
- Spain blocked local access to Polymarket and Kalshi during gambling-license proceedings.
- Indonesia blocked Polymarket after markets appeared on President Prabowo Subianto’s possible exit.
- Hyperliquid launched canonical prediction markets for offchain events using USDC.
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Spain and Indonesia moved to restrict prediction market platforms over gambling-law concerns, while Hyperliquid launched prediction markets for real-world offchain events inside its trading platform.
Spain’s gambling regulator blocked local access to Polymarket and Kalshi “as a precautionary measure” after the Ministry of Social Rights, Consumption, and Agenda 2030 opened legal proceedings against both companies over apparent operation without required gambling licenses. Spain’s Directorate General for the Regulation of Gambling ordered the block to remain in place until the proceedings are resolved, with the process expected to take three to four months.
Spain’s regulator said prediction markets are treated as games of chance when users bet on uncertain future outcomes, meaning platforms need a specific administrative license to operate inside Spanish territory. A Polymarket spokesperson said the platform was “committed to engaging constructively with relevant authorities in every jurisdiction,” while a Kalshi spokesperson declined to comment.
Kalshi and Polymarket were described as two of the largest prediction market platforms by trading volume, with combined weekly notional volume of $6.1 billion, according to DeFi Rate. The restrictions place two major event-betting platforms under sharper pressure as regulators debate whether prediction markets should be treated as forecasting tools or gambling products.
Indonesia Blocks Polymarket Over Presidential Exit Bets
Indonesia blocked Polymarket after the platform hosted wagers on whether President Prabowo Subianto would leave office before the end of his five-year term, which is scheduled to run until October 2029. Indonesia’s Ministry of Communication and Digital Affairs described Polymarket as an “online gambling site disguised as a prediction market,” placing the action inside the country’s broader online gambling crackdown.
Alexander Sabar, an official at Indonesia’s Ministry of Communication and Digital Affairs, said, “The government will not allow any form of online gambling in Indonesia.” Sabar added, “Activities like Polymarket involve betting and speculation on uncertain outcomes, thus violating Indonesian law.”
The Indonesian government said it blocked access to Polymarket and similar services “as a measure to protect the public, especially the younger generation and users of the national digital space,” because the services were suspected of facilitating online gambling practices.
Polymarket listed markets on May 21 allowing users to bet on whether Prabowo would leave office before May 31, June 30, or Dec. 31, 2026. The Prabowo-related market recorded more than $46,000 in trading volume, with traders pricing a 1% chance of him leaving office by May 31, a 2% chance by June 30, and an 18% chance by the end of 2026.
Indonesia’s ministry did not specifically name the presidential exit market in its statement, instead framing Polymarket broadly as a gambling platform operating in violation of Indonesian law. Australia, France, Poland, Singapore, Ukraine, Switzerland and more than 30 countries have restricted or blocked access to Polymarket over gambling concerns, while India was identified as one of the latest countries to restrict access before Spain’s move.
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U.S. Scrutiny Adds Pressure
U.S. lawmakers on the House of Representatives’ Oversight and Government Reform Committee initiated a probe into Kalshi and Polymarket over insider trading concerns. Committee Chair James Comer cited reports of “suspiciously timed trades” on the platforms ahead of U.S. military actions against Iran, raising concern that some users may have profited from insider information.
A New York Times report said Commodity Futures Trading Commission officials were pushed out of the agency after voicing concerns about prediction markets such as Kalshi and Polymarket. The CFTC, under U.S. President Donald Trump’s hand-picked chair Michael Selig, has taken the position that the agency has “exclusive authority” over prediction market platforms and has filed lawsuits against state authorities challenging that view.
Hyperliquid Launches Event Markets
Hyperliquid launched canonical prediction markets for offchain events, expanding the decentralized exchange beyond perpetual futures into real-world event contracts. Hyperliquid said validators run automated newsfeed software that publishes markets and votes on deployment and settlement, creating a validator-driven process for launching and resolving event markets.
Hyperliquid’s prediction markets are built on HIP-4 and use Circle’s USDC as the quote asset. The first markets will open around the May Consumer Price Index year-over-year change and the June federal funds rate decision, placing macroeconomic data and Federal Reserve policy inside Hyperliquid’s tradable market structure.
Hyperliquid’s launch lets users trade prediction markets inside the same stack as spot and perpetual futures without moving collateral to a separate platform. Delphi Digital said in a December research report that “the stack is finally mature enough for true crypto superapps (aggregated giants) to exist without being limited to the wallet form factor.”
Matt Hougan, chief investment officer at Bitwise, wrote in a May 19 report that “Hyperliquid has become the ‘super-app’ Atkins envisioned—a ‘non-SEC regulated platform’ offering investors exposure to ‘a variety of asset classes.’” Hougan said Hyperliquid’s HYPE token is “one of the most mispriced assets in crypto today,” arguing that investors are still valuing it as a perpetuals DEX rather than as a broader financial superapp.
FAQ
Why did Spain block Polymarket and Kalshi?
Spain’s regulator said prediction markets need gambling licenses when users bet on uncertain future outcomes.
Why did Indonesia block Polymarket?
Indonesia said Polymarket violated online gambling rules and described it as gambling disguised as prediction markets.
What did Hyperliquid launch?
Hyperliquid launched canonical prediction markets for offchain events using USDC on HIP-4.
What are Hyperliquid’s first prediction markets?
They will cover May CPI year-over-year change and the June federal funds rate decision.
This article has been refined and enhanced by ChatGPT.
