Polymarket Pushes KYC on Crypto Traders as Geoblocking Gaps Draw Global Scrutiny – Bitcoin News

Polymarket cracks down on non-KYC users

Michael Roddan from the news reports that the platform blocks suspicious accounts and cracks down on the use of VPN, which merchants in restricted jurisdictions have long used to circumvent geo-blocking controls. Users who complete know your customer, or KYC, forms can gain access to benefits such as direct colocation for reduced trading latency.

Polymarket operates according to a dual structure. Its international offshore platform has historically offered wallet-based access, a setup that has generated billions of dollars in revenue. trade volume during the 2024 US elections. Its domestic arm, Polymarket US, is operated by QCX LLC under CFTC oversight as a designated contract marketplace and already requires full identity verification for US users.

The gap between these two levels is now the point that regulators and legislators are focusing on.

The platform currently blocks users from approximately 33 to 35 jurisdictions, including the United States, Russia, France, the United Kingdom, Germany, Iran and the Netherlands. Its terms of service explicitly prohibit VPNs or other tools from circumventing these restrictions. Despite this, cheap VPN access is believed to have made geoblocking porous, exposing Polymarket to possible OFAC sanctions violations and anti-money laundering failures.

This month, Spain ordered Internet service providers block access to Polymarket due to unlicensed gaming issues. Similar actions took place in Indonesia and India. An oversight letter from the U.S. House of Representatives, also submitted this month, asked Polymarket to detail its KYC enforcement, geo-blocking controls and systems for detecting suspicious commercial activity.

High-profile cases have added to the pressure. US Army Soldier Gannon Ken Van Dyke faces allegations to use classified information to transact on Polymarket, a case that highlights the legal exposure that anonymous access creates. Alleged coordinated exchanges over military and geopolitical events have sparked greater scrutiny from researchers and regulators.

Polymarket published enhanced market integrity rules in March 2026, covering both platforms. These rules include surveillance partnerships, anomaly detection systems and blockchain forensic medicine thanks to Chainalysis. Violations may result in account suspension, permanent bans, financial penalties, or referrals to law enforcement.

For traders who prefer pseudonymous access, this change adds friction. For Polymarket, this is a calculated move aimed at reducing regulatory exposure while preserving the platform’s ability to operate, attract institutional partnerships and maintain its relationships with investors, including the parent company of the New York Stock Exchange (NYSE).

The widest prediction market sector, including competitors like Kalchimonitor closely. KYC requirements and real-time monitoring are increasingly becoming minimum requirements for platforms that wish to operate long-term in regulated markets.

Polymarket has cooperated with authorities in some cases and has publicly highlighted its surveillance capabilities. The platform has not specified a deadline for when identity verification will become mandatory for its international user base. This response could come from regulators before coming from Polymarket.

But the real question is which regulators are actually in control. This year, state regulators have clashed with US federal authorities, particularly the CFTC. Just yesterday, President Donald Trump posted on Truth Social: argue that prediction markets fall under the CFTC’s jurisdiction, even though state regulators continue to file lawsuits against prediction market platforms and issue cease and desist orders.