Crypto Betting on 2024 Election Surges Despite Crackdown

As the 2024 US presidential election approaches, a new trend in political betting is growing rapidly in the cryptocurrency world. Platforms like Polymarket, Kalshi, and PredictIt are experiencing a significant increase in bets on election outcomes, even as US regulators intensify efforts to control these activities.

Polymarket is at the forefront of this trend. This decentralized finance (DeFi) platform allows users to wager on various topics, from election winners to the possibility of alien contact.

A recent Bloomberg report highlights that wagers related to US election outcomes on Polymarket have increased by over 500% in recent months, nearing $1 billion. This rise is partly due to major events like President Joe Biden's withdrawal from the race and an attempted assassination of former President Donald Trump.

Polymarket claims it has blocked US users since 2022 due to a settlement with the Commodity Futures Trading Commission (CFTC). However, many US-based users reportedly bypass these restrictions using virtual private networks (VPNs). Social media also contains numerous guides on accessing Polymarket from the US, and traders openly discuss their activities despite the restrictions.

This surge in crypto betting has raised concerns among US regulators. The CFTC's Enforcement Director, Ian McGinley, emphasized the need for all derivatives markets to comply with the law, regardless of the technology used. Still, legal experts argue that the CFTC's guidance on blocking US users from DeFi platforms is insufficient.

Elizabeth Davis, a partner at Davis Wright Tremaine and former CFTC chief trial attorney, noted that DeFi protocols lack clear guidance on regulatory compliance. Former President Donald Trump has even shared Polymarket's odds of his return to the White House, with data suggesting a 55% chance of his victory.

CFTC Chairman Rostin Behnam warned that these election-related contracts could undermine the integrity of the democratic electoral process.

The rise of crypto betting platforms like Polymarket reflects broader trends of decentralization and innovation in finance. These platforms operate outside traditional regulatory frameworks, posing challenges for authorities trying to enforce existing laws. The lack of clear regulations for DeFi platforms complicates their compliance efforts.

Currently, the total cryptocurrency market cap stands at $2.17 trillion. The crypto market's volatility underscores the dynamic nature of this emerging industry and its potential impact on various sectors, including political betting.

In summary, the increase in crypto-based political betting ahead of the 2024 US election highlights the challenges and opportunities posed by DeFi platforms. As regulators navigate this new landscape, the future of crypto betting and its role in politics remains uncertain. The intersection of technology and politics will continue to be a topic of interest and debate.