Polymarket's Identity Push: What New Rules Mean for Crypto Traders

Polymarket is shaking up its approach to user verification, marking a significant shift from its previous permissionless trading model. This change comes as the prediction market giant navigates increasing regulatory scrutiny.

The Timeline of Changes

The story unfolds as Polymarket begins enforcing stricter identity checks on its users. By June 5, the House Oversight Committee requested records related to identity verification and geographic enforcement. This move signals the mounting legal pressures the platform faces.

Historically, Polymarket operated with a relatively open-door policy. Trade through a simple wallet-connect mechanism and deposit USD Coin (USDC) on Polygon. No personal documents needed. But as sanctions and regulatory hurdles mount, the company is beginning to close this chapter. VPNs, once a popular tool among privacy-focused traders, are now being banned. Accounts that use IP workarounds risk suspension or permanent bans.

Alongside this, massive deposit-trade-withdraw cycles have been ringing alarm bells. Polymarket has started tightening its grip on seven-figure positions that don’t align with its updated anti-money laundering thresholds.

Who Wins and Who Loses?

So, what’s the fallout from Polymarket’s new stance? For privacy advocates who championed permissionless access, this is bad news. The platform is surrendering some of its decentralized allure. Yet for investors with a more mainstream view, there’s a silver lining. Stronger compliance measures could reduce the risk of shutdowns, blocked withdrawals, and other regulatory actions.

The best investors in the world are always adapting. They know that when the rules tighten, opportunities shift rather than disappear. Those who can swiftly navigate these changes will still find ways to benefit.

However, what about the international user base? More than 33 countries now face full restrictions or technical blocks. This includes OFAC-sanctioned states and jurisdictions with strict gambling laws. Traders in these regions will need to reassess their strategies. They can no longer rely on VPNs to access Polymarket’s services.

What’s Next for Polymarket?

Looking at the current trajectory, Polymarket’s changes hint at a future of increased control and surveillance. Despite the tightening grip, the platform’s international branch remains separate from Polymarket US. While the US arm has implemented full KYC since acquiring a CFTC-licensed exchange in 2025, the international arm’s rules are just starting to evolve.

Expect more identity requests if your trading activity stands out. The message is clear: play within the lines, or face limitations.

Will this regulatory tightening stifle growth or usher in a more secure trading environment? Here’s the thing: It’s both. As identity checks become a standard, new barriers will deter some users. But for those willing to adapt, the world is ripe for those with patience and preparation. Long Bitcoin, long patience.