JPMorgan is reported to have quietly terminated its primary banking relationship with prediction markets platform Polymarket last year, citing regulatory concerns at a time when the US Commodity Futures Trading Commission had already barred Polymarket from serving American customers. The disclosure, which circulated in financial media this week, adds a significant wrinkle to an already complex regulatory picture surrounding the fast-growing prediction markets sector.
Polymarket has pushed back on the characterisation. The company says that while JPMorgan closed the primary account, it retains a “close, active relationship” with the bank covering operational integrations and fund flows. The distinction matters: losing a primary account is a material operational event, but maintaining ancillary banking access suggests the break was not total.
The debanking backdrop
The timing is awkward for JPMorgan. The US Department of Justice is currently investigating JPMorgan and eight other major banks over allegations of politically motivated debanking practices, a charge the banks deny. Court filings in a separate matter recently disclosed that Capital One closed 385 accounts linked to President Trump in 2021, citing financial activity consistent with money laundering patterns. JPMorgan’s account closure of Polymarket, a platform whose content touches political and electoral events, inevitably draws scrutiny in that context, even if the regulatory rationale behind the decision was the CFTC’s restrictions on US customer access rather than the subject matter of the markets themselves.
New York City Council Speaker Julie Menin has separately requested information from Polymarket as part of an inquiry into its marketing practices. That investigation has attracted relatively little attention alongside the federal probes, but it signals that regulatory pressure on prediction markets is not confined to Washington. State and municipal authorities are beginning to examine the sector’s conduct independently.
Investor appetite holds firm
None of this appears to have cooled the capital markets. Polymarket is in early-stage talks to raise approximately $1 billion in a new funding round at a valuation of more than $20 billion, according to reports citing sources familiar with the discussions. The company’s annualised revenue has more than tripled since its April fundraise, surpassing $1.2 billion, a trajectory that gives institutional investors reason to look past the regulatory turbulence, at least for now.
The Polymarket situation reflects a structural tension that sits at the heart of the debanking debate. Prediction markets occupy an ambiguous regulatory category: they are neither straightforward betting operators nor licensed financial exchanges in the conventional sense, and their intersection with political outcomes creates reputational risk for banking counterparts that goes beyond standard compliance calculations. Banks subject to their own regulatory examinations have historically been cautious about clients whose primary regulators are not aligned.
The commercial question for Polymarket in the near term is whether it can secure a stable, diversified banking stack that reduces dependence on any single institution. The fundraise, if it closes at the reported terms, would substantially improve its negotiating position with banking partners and add the kind of institutional backing that can make a compliance conversation easier to have. Whether regulators at the CFTC or DOJ view the round as a signal of legitimacy or of scale worth scrutinising more closely is a separate matter entirely.
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