JPMorgan Ended Banking Relationship with Polymarket over Regulatory Concerns — WSJ

By Ben Glickman, Katherine Long and Caitlin OstroffJPMorgan Chase ended its banking relationship with prediction market Polymarket last October over regulatory concerns, according to people familiar with the matter.The move adds fuel to fights in Washington over debanking and growing nationwide scrutiny of prediction markets' business practices, though the bank still maintains some ties to Polymarket and other prediction-market companies.A Polymarket spokesman said the company maintains "a close, active relationship with JPMorgan across multiple entities." Polymarket Chief Executive Shayne Coplan has spoken at three of the bank's events in the past year, the spokesman added.A large investor in Polymarket connected the company to major banks, including Citigroup and Fifth Third earlier this year, with initial meetings going well, according to a person familiar with the matter. The investor hoped to get Polymarket access to larger banks over a series of smaller ones they had been working with.Citigroup and Fifth Third did not immediately comment.JPMorgan was already in the Trump administration's crosshairs for alleged debanking, or improperly closing customer accounts for political reasons. The president has ordered regulators to probe if banks engaged in "politicized or unlawful debanking" and to take appropriate action. Last month, JPMorgan was one of several banks subpoenaed by the Justice Department on the subject.Investigations by regulators and prosecutors are ongoing, and banks are anxiously awaiting findings.Donald Trump Jr., the president's son, is an investor in Polymarket through his investment fund 1789 Capital. Polymarket primarily operates an offshore, cryptocurrency-based platform, where American traders are barred. The company launched a regulated app for U.S. customers in December.Dow Jones, the publisher of The Wall Street Journal, has a data partnership with Polymarket.Prediction markets are facing scrutiny from state and federal regulators, including ongoing litigation in more than a dozen states over whether they should be regulated as gambling entities.Earlier this week, Kalshi, a rival prediction market, was ordered to cease most operations in Washington state. The federal Commodity Futures Trading Commission has an ongoing investigation into Polymarket. New York's city council is also investigating Polymarket's marketing practices. A Polymarket spokeswoman previously said the company looks forward to engaging with the city council on the matter.Trump's ire at America's largest bank has been, in part, personal. He has alleged that JPMorgan cut him off from bank accounts and denied him new ones after the Jan. 6 riot at the Capitol in 2021.Earlier this year Trump personally sued JPMorgan and Chief Executive Jamie Dimon for $5 billion for closing family-business accounts.The Financial Times earlier reported on the ended banking relationship with JPMorgan.Banks have maintained they don't close accounts for political or religious reasons. They have said decisions to avoid certain industries or individuals are in accordance with laws requiring banks to screen for criminal activity and money laundering, or in response to other regulatory pressure meant to safeguard banks.Write to Ben Glickman at [email protected], Katherine Long at [email protected] and Caitlin Ostroff at [email protected]