BREAKING: US DOJ Closes Polymarket Probe in Stunning Regulatory Retreat

Prediction markets just scored their biggest win yet—and Wall Street didn't see it coming.

The US Department of Justice quietly dropped its investigation into Polymarket this week, marking a major victory for decentralized finance platforms. Sources suggest the decision came after months of legal wrangling over whether prediction markets constitute gambling or financial instruments.

Market makers react

Polymarket's native token spiked 27% on the news, while traditional sportsbook stocks took a hit. "Apparently the DOJ finally realized their job isn't to protect Vegas casinos from innovation," quipped one crypto trader.

This comes as regulators struggle to apply 20th century frameworks to blockchain-based markets. The CFTC had previously fined Polymarket $1.4 million in 2021—chump change compared to what banks pay for actual fraud.

While compliance teams pop champagne, skeptics warn this could open floodgates for unregulated derivatives. Then again, when has that ever stopped finance before?

Polymarket Investigation Ends Without Enforcement

Polymarket, the online predictions market, has faced a lot of trouble for allegedly violating gambling laws in several worldwide jurisdictions. Today, however, the platform received a major reprieve, as the DOJ is officially ending its probe into Polymarket:

The DOJ ending this probe potentially opens up several doors for Polymarket. Although US-related bets are frequently popular on the platform, Polymarket nonetheless has an ambiguous status in the US. Depending on the terms of this development, it may be able to expand services in this jurisdiction in the coming months.

Since President TRUMP took office, the federal government has dropped charges and investigations into a wide array of crypto firms and individuals. Law enforcement agencies haven’t done this in a few months, but the DOJ’s new Polymarket announcement resumes the trend.

Nonetheless, this pattern has attracted a lot of criticism from regulators and the public, and the DOJ’s Polymarket decision may prove similarly controversial. Recently, the platform’s own community has been disgruntled about a few disputed bet results. It’s unclear how the situation will develop for Polymarket or the surrounding market.