Polymarket is considering expanding identity verification requirements to a much larger share of its user base, according to The Information. Geo-blocking measures are proving ineffective, as users from restricted regions continue accessing the platform through bots, Telegram channels, and alternative frontends, while regulators increasingly view these loopholes as serious compliance violations.
The platform already uses a limited verification system. Users who complete KYC or KYB receive direct access to infrastructure with lower order execution latency. Expanding this framework to all traders would not require the company to build a new system from scratch.
Pressure on the platform is growing from multiple directions. Congressional researchers have requested documents detailing how Polymarket detects suspicious activity and verifies users. Meanwhile, the Ninth Circuit Court of Appeals rejected the argument that federal derivatives law automatically shields prediction markets from state gambling laws. Spain went even further by blocking Polymarket over unlicensed operations and the lack of basic identity verification.
If KYC requirements are expanded to all users, part of the trading volume coming from gray-area access channels could disappear. At the same time, the company’s regulatory risks would be significantly reduced.