How Polymarket Operates From Panama

Since its launch, Polymarket's primary operating entity — Adventure One QSS Inc., a Panamanian corporation — has offered markets that would be plainly illegal if operated by a registered U.S. commodities exchange. These are not edge cases. They represent systematic, ongoing conduct that has persisted despite multiple regulatory actions — and that would constitute clear violations of U.S. law on any registered exchange.

The Commodity Exchange Act (CEA) explicitly prohibits offering certain categories of event contracts, including those involving terrorism, assassination, war, and murder. A registered exchange would be strictly prohibited from listing these products. Polymarket lists them for anyone with a cryptocurrency wallet —no registration, no disclosure, no oversight.

Exhibit APolitical Assassination

Exhibit BNuclear Detonation

The CFTC's 2022 action against Polymarket's predecessor entity, Blockratize Inc., acknowledged these violations. The solution Polymarket chose was not compliance — it was relocation to Panama.

Polymarket requires no identity verification to create an account or begin trading. No name, no address, no age check, no citizenship verification, no sanctions screening of any kind.

U.S. commodities exchanges must implement Know Your Customer (KYC) and Anti-Money Laundering (AML) programs under the Bank Secrecy Act and CFTC regulations. Polymarket appears to have implemented none of these, which could create an open door for:

• Minors to open accounts and place bets with no age verification
• Nationals of OFAC-sanctioned countries (Iran, Russia, North Korea, Cuba, Syria) to trade without restriction
• Individuals on the Specially Designated Nationals (SDN) list to access the exchange freely
• Money launderers to obscure illicit funds through prediction market activity

Multiple independent analyses of on-chain data have suggested systematic wash trading may be occurring on Polymarket — simultaneously buying and selling contracts to create artificial volume and manipulate prices. Under the Commodity Exchange Act, wash trading is explicitly prohibited and would constitute fraud on a registered exchange. Because Polymarket operates with no trade surveillance, no reporting requirements, and no registered oversight, any such activity would occur with no risk of detection.

Polymarket's apparent approach to U.S. regulatory exposure was to incorporate in Panama. Adventure One QSS Inc. — incorporated October 19, 2021, just weeks before a January 2022 CFTC order targeting its predecessor — accounts for 97% of Polymarket's total trading volume.

Polymarket typically declines to respond to media inquiries and has made no public statements acknowledging compliance obligations under any jurisdiction.

In some instances, Polymarket has appeared to publicly encourage insider trading on the platform — promoting the idea that traders with advance knowledge of events should place wagers on outcomes. This would constitute a federal crime on any registered U.S. exchange.