Polymarket is a ‘social epistemic tool’ for the public, Vitalik Buterin argues as CFTC probe intensifies

Key receivers

Polymarket's trading volume exceeded $390 million as interest in election betting grew. Vitalik Buterin opposes the classification of Polymarket as gambling.

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Ethereum founder Vitalik Buterin has come to the defense of decentralized prediction market platform Polymarket amid increasing regulatory scrutiny. Buterin's endorsement comes at a critical time when the US Commodity Futures Trading Commission (CFTC) is proposing restrictions on such platforms.

Buterin argues that classifying polymarkets as gambling is a fundamental misunderstanding of the nature and purpose of prediction markets. He emphasized their role as a “tool of social knowledge[s]Providing valuable insights into future events and public sentiment.

Buterin on X: “Putting polymarkets into the ‘gambling' category is a huge misunderstanding of what prediction markets are or why people (including economists and policy scholars) enjoy them.

The CFTC's proposed restrictions, announced in May, are aimed at curbing U.S. election-related prediction markets, citing public interest concerns. Senator Elizabeth Warren supported this position, signing a motion to ban election-related prediction markets.

Other crypto industry leaders have joined Buterin in opposing the CFTC's position. Gemini founder Cameron Winklevoss praised decentralized prediction markets for “a real public utility,” highlighting their ability to provide useful predictions based on financial accountability. In comments to the CFTC, Gemini urged the regulator to withdraw its proposal.

Decentralized prediction markets are significant innovations with real public utility. They provide valuable information about future events based on financial accountability,” Winklevoss argued.

Coinbase's chief legal officer, Paul Grewal, expressed concerns about the ambiguous definition of “gaming” in the CFTC's proposal. These responses highlight the industry's opposition to what they see as overly broad regulatory measures.

Despite regulatory challenges, Polymarket has been growing in popularity, especially in anticipation of the US election. In July, Crypto Briefing reported that the platform hit more than $100 million in monthly trading volume. According to the latest Dune Analytics data, the platform's monthly trading volume reached more than $390 million in August, recording 53,981 monthly active traders. This growth is largely due to increased interest in election-related outcomes.

The platform currently has Donald Trump and Kamala Harris tied at 50% of predictions for the presidential race, while Republicans lead the Senate at 71%, compared to Democrats' 29%. These figures show the role of the platform in gauging public sentiment on political issues.

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