JPMorgan Cut Polymarket's Banking Ties in October 2025 Over Regulatory Concerns — and Still Wants to Underwrite Its IPO
JPMorgan Chase terminated Polymarket's banking relationship in October 2025 over regulatory concerns, the Financial Times reports, while simultaneously positioning itself for a potential IPO underwriting role. The debanking occurred before Polymarket re-entered the US market. Polymarket disputes the characterisation, saying it retains a 'close, active relationship' with JPMorgan on operational matters.
JPMorgan Chase terminated its banking relationship with Polymarket in October 2025 over regulatory concerns, the Financial Times reported on August 14, 2026. The debanking occurred when Polymarket was still barred from US users — following its 2022 $1.4 million CFTC settlement — and was preparing its US re-entry under the new CFTC leadership that emerged after the change of US administration. Polymarket has moved to a new, undisclosed banking partner. Polymarket disputed the FT's framing, saying it maintains a 'close, active relationship' with JPMorgan on 'operational integrations and fund flows.' Despite the debanking, JPMorgan invited Polymarket CEO Shayne Coplan to a private banking conference in February 2026 and is reportedly positioning for an underwriting role in a potential Polymarket IPO.
For UK readers, the JPMorgan debanking story has a direct parallel in the crypto sector's recent history. Major US and UK banks have repeatedly terminated banking relationships with crypto exchanges and DeFi platforms on regulatory risk grounds — a pattern that the Financial Conduct Authority and the UK's Payment Systems Regulator have examined in the context of financial inclusion and competitive harm. Polymarket, operating globally from outside the US before its 2025 re-entry, would have been subject to the kind of regulatory risk assessment that JPMorgan applied to Binance, Coinbase, and other crypto platforms when they were in similar regulatory positions. The UK banking access question for prediction market operators remains unresolved: UK-facing prediction market activity is not currently licensed under the Gambling Commission or FCA frameworks, creating a similar regulatory ambiguity that could trigger comparable banking decisions.
The IPO dimension is the commercially significant element. JPMorgan terminating a banking relationship but simultaneously pursuing IPO underwriting is not contradictory — the two relationships involve different risk profiles and different parts of the bank — but it creates a reputational gap that will be visible in the IPO prospectus due diligence process. Underwriters are required to conduct material risk factor analysis; a prior debanking by one of the lead underwriters' own institution would be a disclosable event. Whether JPMorgan can credibly underwrite a Polymarket IPO having terminated its banking relationship for regulatory risk will depend on how the US regulatory landscape resolves between now and the time Polymarket files — and the current litigation trajectory (eleven state suits, one municipal suit, a pending circuit split, and a SCOTUS review probability prediction market traders are pricing at 64%) suggests that resolution is not imminent.
The October 2025 timing also reveals that major institutional banks were assessing prediction market regulatory risk before the 2026 litigation wave began. Every CFTC suit against a state, every state AG suit against a platform, and every municipal complaint filed in 2026 postdates JPMorgan's debanking decision. The bank's regulatory risk assessment preceded the actual enforcement actions by months. This suggests that JPMorgan's legal and compliance teams modelled the state-vs-federal regulatory conflict as a foreseeable risk — not a surprise — and made a banking decision accordingly, while keeping the door open commercially for when the risk eventually resolves. That institutional foresight, rather than the banking relationship itself, is the most informative aspect of the FT's report.
Operators mentioned in this article
Recent updates
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinising oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures trading 'oftentimes after the fact.' The remarks highlight the CFTC's dual role as both the platforms' federal protector and their manipulation watchdog.
Pentagon Bars Personnel From Trading on Military Information After $400K Prediction Market Scandal
US Defense Secretary Pete Hegseth issued an October 20 memo barring Department of Defense personnel from making financial transactions using non-public information, explicitly naming Polymarket and Kalshi. The directive follows the prosecution of a Special Forces soldier accused of making more than $400,000 on Polymarket by betting on a mission to capture Venezuelan President Nicolas Maduro. Hegseth's rationale is a national-security concern: a bet on a military outcome creates a market signal adversaries can read. 'Our enemies watch movements in these markets,' the memo states.
Crypto.com and Novig Sue Missouri as Market Leaders Hold Back — Eighth Circuit Now in Play via Iowa
Crypto.com and Novig filed federal lawsuits on October 16 challenging Missouri's cease-and-desist orders, arguing their sports event contracts fall under exclusive CFTC jurisdiction. The suits came as Missouri's 30-day compliance window closed. Notably, the market leaders — Kalshi, Polymarket, Robinhood, and Underdog — have not sued; Missouri said it is in 'ongoing discussions' with Kalshi. The outcome is tied to the Eighth Circuit, now weighing the same question in Kalshi's Iowa appeal — the fourth federal circuit to take up the prediction market question.