Polymarket's Regulatory Tightrope
JPMorgan Ends Formal Banking With Polymarket Amid Regulatory Concerns But Maintains Ties
Key Points
Polymarket is facing lawsuits related to illegal sports betting in multiple states, adding a legal risk layer beyond the existing CFTC investigation.
Polymarket says it maintains a 'close and active relationship across multiple entities' with JPMorgan, including ongoing operational integrations and management of customer fund flows, despite ending formal banking ties.
Polymarket has moved to a new banking partner after JPMorgan cut ties in October 2025, with the name of the lender not disclosed publicly.
Regulatory scrutiny of the prediction-market sector remains intense, with the CFTC continuing its investigations and broader state-level actions cited as part of ongoing industry risk.
JPMorgan Chase ended its banking relationship with Polymarket in October 2025, citing regulatory concerns about the prediction market platform, according to CryptoTimes. The bank told Polymarket it needed to find a new banking partner, and Polymarket has since moved to an unnamed lender.
Despite cutting formal ties, JPMorgan has not walked away entirely. The bank has invited Polymarket CEO Shayne Coplan to speak at high-profile events in Miami alongside Tom Brady, and is eyeing a potential underwriting role if Polymarket goes public, Bitcoin Foundation reported.
From U.S. Ban to $20 Billion Valuation Target
Polymarket was barred from serving U.S. users in 2022. The Commodity Futures Trading Commission fined the company for running an unregistered derivatives platform. A derivatives platform lets users bet on the outcome of real-world events, like elections or sports games.
Things changed fast under the Trump administration. Regulatory pressure eased, and Polymarket re-entered the U.S. market at the end of 2025. Now the company is seeking more than $1 billion in new financing. Its target valuation is about $20 billion — more than double the roughly $8 billion valuation it carried in 2025, according to SL Guardian.
JPMorgan Cuts Banking Access but Keeps the Door Open
JPMorgan's decision to end banking services was driven by regulatory risk, not a falling out, Grafa reported. Banks face serious legal exposure when they work with companies under government investigation. The CFTC is still actively investigating Polymarket.
Still, Polymarket says it has a "close and active relationship across multiple entities" with JPMorgan. That includes ongoing help managing customer fund flows. JPMorgan, for its part, appears to be keeping Polymarket at arm's length publicly while staying close enough to win future business, according to CryptoTimes.
Lawsuits and CFTC Probes Stack Up Legal Risk
Beyond the federal investigation, Polymarket faces lawsuits in multiple U.S. states over illegal sports betting. State regulators treat prediction markets differently than federal ones. That patchwork of state laws creates a legal minefield for any company trying to scale in the U.S., SL Guardian reported.
The CFTC investigation remains open and ongoing. Regulatory scrutiny of the entire prediction-market sector is intensifying, not easing. That makes major banks cautious, even as they want a seat at the table for a potential Polymarket IPO, according to Bitcoin Foundation.
Banks Want IPO Fees More Than They Fear the Risk
JPMorgan's calculus is straightforward. Cutting day-to-day banking ties reduces regulatory exposure now. But staying close to Coplan and Polymarket's leadership keeps the bank in line for underwriting fees later. An IPO at a $20 billion valuation would generate hundreds of millions in fees.
For Polymarket, the strategy is also clear. It needs banking access to operate and investor confidence to raise $1 billion-plus. Keeping JPMorgan engaged — even informally — signals legitimacy to other potential partners, according to Grafa.
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