Polymarket Wants Traders to ID Themselves as It Faces Sanctions, Legal Risks
The Takeaway
- Polymarket clamps down on customer use of VPNs, blocks some suspicious accounts
- Users can now opt in to sharing identity verification, such as passports
- Those verified users will get a several millisecond jump on other traders
In Russia, making bets on Polymarket isn’t permitted by the popular online prediction market’s rules. But that hasn’t stopped Ruslan Kashaev, a software developer who lives in the small Russian city of Ufa, a 15-hour drive from Moscow, from turning the site into a lucrative source of income.
Using automated trading bots hosted on the Telegram encrypted messaging service, Kashaev has convinced thousands of Russian-speaking traders to bet on Polymarket. Kashaev’s website and YouTube channel, Russian Polymarket, promotes strategies to Russians seeking big, fast returns on the prediction market: “For every 10,000 rubles, that’s about 4,000 rubles in profit every 3–4 days.” He makes money by charging fees for people to use his bots.
Kashaev is one of many software developers, online financial influencers and day traders tapping into Polymarket’s Panama-based prediction market from countries where users are legally barred. Polymarket says users in 33 different countries can’t bet on the platform “due to regulatory requirements and compliance with international sanctions.”
Some are in legally risky jurisdictions such as Russia, where certain financial institutions and individuals are under U.S. sanctions, or Iran, which is subject to a total U.S. embargo. Traders in those countries bet on everything from the weather to the Iranian war.
Until recently, Polymarket turned a blind eye to traders like Kashaev. Part of the site’s appeal to a subset of users, in fact, has been its relaxed approach to identifying its customers. Unlike its rival Kalshi, which has mandatory identification for its customers, Polymarket has long opted to allow anyone to sign up with only an email.
Now, though, Polymarket is starting to clamp down. The site has made it harder to use a virtual private network, software that encrypts the connection between users and the internet, to access the site. It does so by blocking certain IP addresses—those that websites have learned over time are used by VPN providers—and blocking accounts with suspicious connection patterns.
Polymarket is also now asking some customers to identify themselves to access faster trading technology.
Prediction market startups are booming. The key players, Polymarket and Kalshi, are starting to earn revenue from millions of bettors placing wagers on sports, elections and TV shows. Polymarket is currently raising funds at $15 billion, while Kalshi is closing a fundraising round valuing it at $22 billion.
The platforms have threatened to upend traditional sports betting and gaming industries and are attracting a growing chorus of critics. Prediction markets are now battling an array of lawsuits from state lawmakers who argue that Polymarket and Kalshi are running illegal betting websites. Congress this month opened an investigation into insider trading on the platforms and whether attempts by the companies to enforce bans on customers in certain countries are working, warning that lawmakers may be forced to intervene.
To make matters worse for Polymarket, the former market leader is losing ground to its younger competitor, Kalshi. The two companies have taken different approaches to regulation. Kalshi got approval from regulators to operate legally in the U.S. and now runs a licensed exchange that serves institutional traders and accesses the deep American consumer betting market.
Polymarket, on the other hand, shifted its operations offshore in 2022 after U.S. regulators banned it. That officially cut the company off from American gamblers, although many continued to access the site using VPNs. Polymarket last year acquired a licensed U.S. exchange that could insulate the company from any potential regulatory moves to rein in offshore sportsbooks, but the launch of its regulated platform has been delayed amid engineering problems and staff turnover, The Information previously reported.
A spokesperson for Polymarket said it had identified and permanently banned Kashaev’s account and was “thoroughly reviewing the account’s activity” in its efforts to enforce restricted jurisdictions. Polymarket said it refers cases of wrongdoing to law enforcement, maintains “a comprehensive market integrity framework” and looks forward to engaging with Congress on the investigation.
Balancing Act
Polymarket is walking a tightrope in its efforts to clamp down on trading volume that comes from prohibited jurisdictions. By cracking down, it risks losing business at a time when Kalshi is pulling ahead in terms of overall trading volume and equity valuation.
The move has already upset some of Polymarket’s users, according to messages posted in the company’s Discord community forum. “What? Is this an attempt to destroy everything,” said one user. “Polymarket will go down the drain if they make KYC mandatory,” said another, using the abbreviation for know your customer, a process banks and others use to verify the identity of clients.
In response to customer complaints, senior Polymarket engineer Mustafa Aljadery said in a post on X that the KYC checks targeted customers accessing Polymarket’s application programming interface “in certain jurisdictions” and that Polymarket “remains kyc free for all other users.”
But if Polymarket doesn’t start enforcing its policy on prohibited jurisdictions, it risks regulatory action. Regulators in the Netherlands and other countries have already threatened it with penalties if it continues to provide an illegal gambling platform to their residents.
Polymarket has a lot to contend with when it comes to choking off users in prohibited territories. A cottage industry of social media influencers and app developers has sprung up to coach prospective prediction markets customers on how to access Polymarket using a VPN.
Or they can bypass the company’s tools that automatically block certain countries or regions: They can use one of the many trading interfaces hosted on Telegram that promote their ability to skirt Polymarket’s compliance controls.
In some cases, Polymarket has signaled its appreciation to influencers in risky regions for bringing in users. Daniil Adveev, a young crypto promoter based in Moscow, said he earns referral revenue from Polymarket for driving new users to the site from Russian-speaking countries.
Thanks to the number of customers Adveev has introduced, Polymarket recently sent a gift to him—a box of Polymarket-branded sweatshirts and hats—which he said it shipped to Russia via a friend’s address in North America.
Adveev, who uses a VPN to access Polymarket, said the majority of his income comes from referring users to various crypto projects, and since he has been promoting Polymarket since 2025, “it’s hard to say exact numbers, but it’s a lot.”
Another influencer is Tehran-based Exdigy, who uses a pseudonym. He makes YouTube tutorials on how to access Polymarket from Iran. Exdigy directs users to join Polymarket with his paid referral link. (Polymarket, through a partnership with marketing group Dub, has paid these kinds of affiliates 1 cent for each click on their referral links and $10 if a referred customer made a deposit.)
Exdigy’s advice includes signing up to Polymarket with a crypto wallet that hasn’t had any contact with Iranian exchanges. “And be sure to log in with a VPN,” he says in one video. “Everyone knows this by now. A VPN, preferably a static IP. You can easily get one for this low cost.”
Faster Speeds for ID
Polymarket is enticing users to provide identifying information by offering them faster trading speeds. Earlier this month, it rolled out an online portal where individual customers can submit information including passports, licenses and proof of residence.
The online forms ask Polymarket customers to verify they are not a resident of any regions prohibited by its terms of service, where governments have banned the prediction market from operating, or of countries subject to U.S. sanctions, such as Russia, Syria, Cuba and North Korea. Polymarket is also asking business users, such as developers of trading apps that plug into Polymarket, about their investors and location.
Submitting the information isn’t mandatory. But customers who complete the forms can access Polymarket’s U.K.-based server, which offers the fastest trading speeds, giving them an advantage of milliseconds over other users.
That advantage is important for a key subset of Polymarket customers that drive significant levels of high-speed, automated trading volume, including third-party developers that plug into the company’s API. A difference of milliseconds can make or break some trading strategies.
