Polymarket Cracks Down on VPN Users as Legal Pressure Intensifies in Dozens of Countries

At a glance:

• Polymarket is blocking VPN users and requiring identity verification for high-value trades
• Over 30 countries have banned or restricted the platform, including Spain and Indonesia
• The crackdown reflects broader regulatory pressure on prediction markets globally

The VPN Crackdown

Polymarket has begun actively targeting users who rely on VPNs to circumvent its geoblocking restrictions, implementing technical barriers and selective identity verification as legal pressure intensifies across dozens of jurisdictions. The platform now blocks known VPN IP addresses and flags accounts showing signs of evasion, according to reports in The Information.

Users engaging in unusually large positions or rapid, high-value transactions now face identity verification requests to comply with anti-money laundering regulations. Basic wallet-based trading using USDC stablecoin on Polygon remains available in permitted regions, though the platform has shifted away from fully permissionless access as the default—a key differentiator from competitor Kalshi.

Global Regulatory Pressure Mounts

The enhanced enforcement comes amid expanding legal and regulatory pressure worldwide, with Spain and Indonesia implementing full bans. Spain recently directed internet providers to block both Polymarket and Kalshi after the platforms operated without gambling licenses and failed to include adequate minor protections. These blocks will remain during disciplinary proceedings expected to last three to four months.

More than 30 jurisdictions now restrict or ban prediction markets, including Argentina, Brazil, India, France, Belgium, Australia, and the United Kingdom. In the United States, the CFTC sued Minnesota over its law criminalizing prediction markets, with Kalshi joining the challenge through a federal lawsuit arguing the statute oversteps state authority.

Historical Context and Precedent

Polymarket's approach mirrors enforcement actions against major crypto exchanges that allowed U.S. customers to trade without proper KYC checks. Both Binance and KuCoin faced criticism for letting Americans operate without identity verification, with KuCoin reportedly advertising the lack of KYC as a feature and taking steps to hide U.S. users' presence. The CFTC has pointed to cases where Binance provided guidance to U.S. users on using VPNs to avoid detection.

The platform previously settled with the CFTC for $1.4 million in 2022 for operating unregistered binary options. In 2025, Polymarket acquired a licensed derivatives exchange, establishing a separate U.S. arm requiring complete Know Your Customer compliance—marking a strategic shift toward regulatory acceptance in its home market.

Broader Implications for Crypto and Online Regulation

The VPN enforcement trend extends beyond prediction markets, with jurisdictions like Utah and the UK exploring stricter rules on VPN usage to bypass online content restrictions. Utah's Online Age Verification Amendments now prohibit companies from helping users circumvent age checks, holding platforms accountable for access attempts from within the state regardless of masking technology.

Critics warn this approach pushes platforms toward mandatory real-world identity verification, potentially ending anonymous internet access for many services. The Electronic Frontier Foundation has raised concerns about the broader implications for digital privacy and freedom.

Industry-Wide Shift Toward Permissioned Access

Polymarket's move toward permissioned access reflects a broader crypto industry trend, with activity increasingly built around stablecoins and centralization points. The platform's international operations remain separate from its U.S. arm, which maintains stricter compliance standards following the 2025 acquisition.

While blockchain-based trading still offers some anonymity through wallet addresses, the combination of IP blocking, transaction monitoring, and identity verification signals a fundamental shift in how prediction markets operate at scale.

Looking Ahead

As regulatory pressure continues mounting, platforms like Polymarket face a delicate balance between maintaining global reach and complying with increasingly fragmented legal requirements. The outcome of ongoing cases in Spain, Minnesota, and other jurisdictions will likely set precedents for how prediction markets operate internationally—and whether anonymous trading remains viable in the long term.