Polymarket in the US: What the CFTC Settlement Changed

Polymarket is available to US residents only through Polymarket US, a separate exchange operated by QCX LLC and regulated by the Commodity Futures Trading Commission. The international Polymarket.com venue remains closed to US users. That separation is not a branding exercise. It is the legal structure Polymarket built after the CFTC fined it $1.4 million in 2022 for offering unregistered binary options.

The short version for a trader: "Polymarket is legal in the US" is the wrong question. The right question is which Polymarket. The US venue has its own accounts, its own order book, its own fee schedule and its own resolution process. It is not the offshore platform with a US label.

What the CFTC found in 2022

On January 3, 2022, the CFTC filed and settled charges against Blockratize, Inc., doing business as Polymarket. The order found that Polymarket had operated an illegal unregistered facility for event-based binary options beginning around June 2020. It had offered more than 900 event markets, including contracts on Ethereum's price, US COVID-19 case counts and the 2020 presidential election.

The legal problem was not that the contracts were on a blockchain. It was that each binary pair was a swap under the Commodity Exchange Act, and swaps can be offered to US customers only on a registered exchange. Polymarket had neither a designated contract market designation nor a swap execution facility registration.

The settlement required a $1.4 million civil penalty, a wind-down of markets that did not comply with the Commodity Exchange Act, and a cease-and-desist order. The CFTC reduced the penalty to reflect what it called Polymarket's substantial cooperation. Acting Enforcement Director Vincent McGonagle said at the time: "All derivatives markets must operate within the bounds of the law regardless of the technology used."

In practice, Polymarket geoblocked US users and kept operating internationally. That is why the offshore site was still widely used abroad during the 2024 election, while US residents were told to stay away.

The $112 million route back

Polymarket did not win its way back through a new registration from scratch. It bought a licensed venue.

In July 2025, Polymarket closed the acquisition of the holding company of QCX LLC, a CFTC-designated contract market, and QC Clearing LLC, its clearinghouse. The price was $112 million. QCX was already a CFTC-licensed derivatives exchange when Polymarket bought it, and it later began operating under the name Polymarket US.

With formal CFTC approval, Polymarket launched a US iOS app on December 3, 2025, initially for waitlisted users and initially focused on sports. The company described the venue as an intermediated exchange under federal rules, not a sportsbook.

The timing matters. In 2024, the CFTC and the Justice Department had opened investigations into whether Polymarket was letting US users onto its offshore platform despite the 2022 settlement. Both agencies closed those investigations in July 2025 without bringing charges, according to CNBC. The re-entry was built on a new regulated entity, not on a reversal of the old findings.

What US traders can actually use

Polymarket US is a separate product with its own cash accounts and its own order book. The international exchange is not available to US residents.

The US venue also resolves markets differently. Polymarket.com uses UMA's optimistic oracle for prediction markets. Polymarket US says the exchange itself determines outcomes using the criteria and sources listed in each market's rules. Its documentation states that resolutions are final under the Polymarket US Exchange Rulebook. That means the disputes over UMA votes that occasionally dominate offshore Polymarket discussion do not apply in the same way to the US venue.

Fees are different too. Polymarket US charges takers a fee based on the published formula: fee equals the fee coefficient multiplied by the number of contracts, the price and one minus the price. With the standard coefficient of 0.0695, a taker buying 1,000 contracts at 50 cents pays about $17.38. At 10 cents, the same 1,000-contract trade costs about $6.26. Makers can receive rebates depending on volume.

The practical consequence is fragmentation. A US trader cannot use offshore liquidity, and an offshore trader cannot use the US book. Prices on the same event can differ because the pools of traders are different.

The rules are still being written

The CFTC has not finished deciding how prediction markets should be regulated. In March 2026 it published an advance notice of proposed rulemaking. In June 2026 it followed with a narrower proposal covering event contracts that involve activities enumerated in the Commodity Exchange Act: terrorism, assassination, war, gaming, or conduct unlawful under federal or state law.

That proposal would create a 90-day review process and a set of public-interest factors for contracts that touch those categories. It is a proposal, not a final rule. It does not resolve every question about sports contracts, election contracts or state gambling law.

Meanwhile, the 2022 settlement is still being enforced. On October 27, 2026, CNBC reported that the CFTC was investigating whether Polymarket had violated the 2022 agreement. The inquiry was said to focus on the platform's controls for detecting where customers are located, its US advertising, and the onboarding and customer-protection processes of the US platform that launched in December. Polymarket declined to comment. An investigation is not a finding of wrongdoing.

What to watch

Three things matter for anyone trading the US venue.

First, the outcome of the CFTC's 2026 compliance probe. If the agency concludes that offshore Polymarket remained accessible to US users, the consequences could reach beyond a fine: they could affect the terms on which the US entity operates.

Second, the rulemaking. The June proposal could restrict or reshape categories of contracts, particularly ones that resolve on a single person's conduct. That is a product risk, not just a legal one.

Third, state law. State regulators are also testing whether event contracts are gambling rather than derivatives. A state-level restriction can change which customers a venue can serve even if the federal rules stay the same.

The useful takeaway is narrow. US residents can trade event contracts on a CFTC-regulated Polymarket venue, with cash accounts, published fees and exchange-determined resolution. They cannot lawfully use the international platform. Anyone who tells you otherwise is describing the offshore product, not the one that settled with the CFTC.