Singapore and CFTC zero in on Polymarket as wildfire bets fuel public outcry

How did a crypto betting platform become a global controversy, drawing ire from Singapore and the FBI, and angering users?

Polymarket’s increasing problems

Singapore shines as a leading hub for technology and innovation. However, when it comes to gambling, the city-state adopts a very conservative approach.

This dilemma recently came to light on January 12, when well-known crypto-based prediction market Polymarket clashed with Singapore’s strict gambling laws.

Polymarket offers a platform where users can use crypto, specifically USDC (USDC), to bet on real-world events, from election results to crypto price fluctuations. While some may view it as speculative entertainment, Singaporean authorities have officially classified it as a gambling site.

When Singaporeans tried to access Polymarket, they faced a serious warning under Section 20 of the Gambling Control Act 2022. This law forms a key part of Singapore’s strict regulatory framework and expressly prohibits gambling through unlicensed operators.

Individuals found to have violated this law may face severe penalties, including a fine of up to S$10,000, six months’ imprisonment, or both. The only legal betting option in Singapore is through Singapore Pools, the state’s officially approved gambling operator.

Alex Zuo, vice president of digital asset custody provider Cobo Global, emphasized the seriousness of the situation in a social media post.

“Polymarket is officially defined as a gambling site in Singapore. If you want to bet, you can only go to a state-owned gambling company. Otherwise, you face fines and imprisonment.”

This isn’t the first time Polymarket has been under scrutiny. What’s behind this growing interest and why is the platform gaining attention for all the wrong reasons? Let’s dive deeper into the unfolding story and its consequences.

Betting on tragedy sparks anger

As Los Angeles battles one of its most devastating wildfire seasons, the resulting disaster has become a grim backdrop to Polymarket’s latest controversy.

The Palisades wildfire, the most destructive fire in Los Angeles history, consumed more than 23,000 acres, destroyed thousands of homes and claimed at least 24 lives.

The devastation left Angelenos grappling with existential questions. But for Polymarket, these deeply personal concerns boiled down to “When will the wildfire in the Palisades be completely under control?” It has turned into betting opportunities offering markets such as. and “How many acres will the Palisades wildfire burn in total?”

This sparked a wave of public outrage, with many accusing Polymarket of profiting from human suffering.

One angry user said: “I don’t understand how people can support Polymarket for these betting markets during the fires. It’s disgusting to turn this tragedy into a way to make money.”

I don’t understand how people can support Polymarket for these betting markets on fires and advertise it to attract users.

It’s disgusting to turn this tragedy into a way to make money.

— Lift Americans (@LiftAmericans) January 9, 2025

Another outraged user added: “Prediction markets directly encourage antisocial behavior. You’re setting up a public and liquid reward mechanism for terrorism.”

Prediction markets directly encourage antisocial behavior. This institution is a profound moral evil, and by default we should not trust anyone who engages in it. You are establishing a public and liquid price reward mechanism for terrorism https://t.co/Qh19fgovdF

— Astrid Wilde 🌞 (@astridwilde1) January 10, 2025

Concerns have also been expressed about the potential for these markets to encourage harmful acts such as arson. As one user noted, “This encourages people to commit arson. “I don’t see any argument against it.”

Far from avoiding controversy, Polymarket appeared to have doubled down. A tweet from official X accounts attempted to inject politics into the discourse by referencing Los Angeles Mayor Karen Bass and her absence during the crisis.

Three years ago, Los Angeles Mayor Karen Bass vowed not to travel internationally and focus on the city.

He was in Ghana when the forest fires broke out.

There is a 19% chance that he will leave office as Mayor before April. pic.twitter.com/G3LyBB4BDN

— Polimarket (@Polymarket) January 13, 2025

But not everyone sees Polymarket’s uncontrollable competitions the same way. Some in the crypto community defended the platform, drawing parallels with insurance companies profiting from disasters.

“Is it really that different?” One supporter disagreed, pointing out that insurance payouts, like prediction markets, ultimately revolve around fiscal incentives tied to crises.

Fintwit’s most politically moderate “educated” financiers joined forces to denounce multimarket on the fence fire, but interestingly failed to realize that insurance companies have a centralized business model to profit from the same outcome. Funny enough, they are the same… https://t.co/igZuYtMuhW

— midpricedog 🪲 (@midpricedog) January 11, 2025

The user also argued that many of the bets were structured to reward outcomes such as containment rather than destruction, noting: “The payouts are largely geared towards stopping fires rather than spreading them.”

Yet this defense did little to sway public opinion. There is wider consensus that Polymarket crossed an ethical line by organizing and advertising these bushfire-related competitions, especially during an ongoing tragedy that has claimed lives and displaced tens of thousands.

Team review by FBI and CFTC

Beyond the recent public uproar, Polymarket’s journey has not been smooth. Since its inception in 2020, the platform has continually tested the limits of what is legally permissible in the prediction market.

The story took a sharp turn when Coinbase, one of the world’s largest crypto exchanges, reportedly announced that it had received a subpoena from the Commodity Futures Trading Commission.

The subpoena, sent directly to Polymarket and shared on social media on January 9, requests general customer information regarding the platform’s activities.

While Coinbase assured its users that there was no need for immediate action, it also made clear that it may have to comply with the CFTC’s request unless legal intervention is made before January 15.

This is not entirely unexpected for those who have followed Polymarket’s journey. The platform faced a $1.4 million settlement with the CFTC in 2022 for operating an unregistered facility that offered event-based binary options.

The CFTC subpoena issued to Coinbase follows the FBI raid on the home of Polymarket CEO Shayne Coplan in mid-November.

On the morning of November 13, 2024, federal agents raided the Manhattan home of Polymarket CEO Shayne Coplan in what many described as an extremely challenging operation.

According to reports, Coplan, 26, was awakened at 6 a.m. when FBI agents executed a search warrant demanding access to his phone and other electronic devices.

The raid took place less than a week after Donald Trump’s victory in the US presidential election; It was an outcome that Polymarket arguably predicted strong odds in Trump’s favor, even though most traditional polls showed a tight race.

Coplan did not hold back and went to X, accusing the outgoing Biden administration of launching a politically motivated attack. In his words, it was a “last-ditch effort” to target companies perceived to be aligned with political rivals.

It is disheartening that the current administration is making a last-ditch effort to go after companies it deems linked to political opponents. We are deeply committed to nonpartisanship, and today is no different, but incumbents need to reflect themselves, too…

— Shayne Coplan 🦅 (@shayne_coplan) November 13, 2024

Even Elon Musk, now set to co-head the Department of Government Efficiency under Trump’s new administration, chimed in, saying, “This looks awful.”

The connection between the FBI raid and the subsequent CFTC subpoena targeting Coinbase reveals a coordinated regulatory effort to scrutinize Polymarket’s operations.

From peak to trough and the road ahead

Polymarket’s journey has been a story of explosive growth, incessant controversy and steady control of the crypto prediction market.

What started as a burgeoning prediction market with several million dollars in monthly revenue by mid-2024 has quickly grown into a powerhouse fueled by the frenzy of the US election.

The platform achieved monthly volume of $111 million in June 2024, according to Dune Analytics. By July, this figure had more than tripled, reaching $387 million.

Polymarket monthly volume table (September 2020 – January 2025): Source: Dune Analytics

As the election season reaches its peak, so does Polymarket. In October, volumes rose fivefold to a staggering $2.5 billion, up from $500 million in September. November shattered all previous records with $2.62 billion in trading volume, the highest in the platform’s history.

Moreover, Polymarket’s cumulative trading volume exceeded $4 billion in 2024, earning mentions on Bloomberg, CNN, and CNBC; This is a rare achievement for a crypto-focused platform.

But the end of election season brought a reality check. Trading volumes dropped significantly; December saw $1.92 billion; This is a significant decline from November’s high.

The downward trend continued in January, with volumes barely exceeding $500 million by mid-month. At this pace, Polymarket could end January at around $1 billion, a 50% decline from December.

While these numbers are still strong compared to pre-election days, they show that the platform is relying on big events to continue its explosive growth.

For now, Polymarket is under intense public and government scrutiny; many are wondering how far the platform is willing to push the boundaries of its controversial model.