According to the Financial Times, JPMorgan notified Polymarket back in October that it needed to find a new banking partner, citing growing regulatory compliance risks.
Keeping bridges intact
The banking relationship soured due to ongoing heat from the U.S. Commodity Futures Trading Commission (CFTC). Back in 2022, the regulator hit Polymarket with a fine for operating an unregistered derivatives platform and banned U.S. traders from using the app.
While the CFTC cleared the New York-based firm to re-enter the U.S. market, the agency still maintains an active investigation into the platform.
Despite shutting down Polymarket’s primary accounts, JPMorgan isn't completely burning bridges. In February, the bank invited Polymarket CEO Shayne Coplan to speak at an exclusive, high-net-worth client conference in Miami.
Sources suggest JPMorgan wants to keep the door open for an underwriting role if Polymarket decides to go public. For its part, Polymarket stated it maintains active relationships with the bank across other operational entities and fund flows.
State crackdowns and insider trading
Year-to-date in 2026, notional trading volume across prediction markets has shattered the $250 billion mark.
That explosive growth triggered legal pushback. Polymarket and rival platform Kalshi face lawsuits from over a dozen U.S. states accusing them of running illegal sportsbooks. The platforms counter that they operate matching exchanges between buyers and sellers rather than acting as a traditional bookmaker.
Insider trading has also emerged as a major headwind. In April, U.S. servicemember Gannon Ken Van Dyke was charged with making over $400,000 on Polymarket by placing wagers using classified info regarding a military raid in Venezuela.
Debanking scrutiny and a $20 Billion valuation
The Polymarket account termination reignites the debate around "debanking," where crypto protocols and tech startups get cut off from traditional financial rails. U.S. authorities are currently investigating several major banks over allegations of unbanking crypto-focused clients.
Banks, meanwhile, argue they are simply managing legal exposure and strict regulatory compliance mandates.
Even facing banking hurdles, Polymarket isn't slowing down. The platform is currently raising over $1 billion in a new funding round that would push its valuation to $20 billion.
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