Polymarket, a prominent player in the prediction markets industry, is taking decisive action against users who utilize VPNs to bypass its geoblocking measures. According to a report by The Information, the platform has begun blocking specific IP addresses associated with VPN services and, in some cases, is requiring users to verify their identities. This move comes amid increasing legal and regulatory scrutiny globally, with outright bans imposed in countries such as Spain and Indonesia.
The new measures combine technical barriers with targeted identity checks to prevent users from circumventing location restrictions. Reports indicate that Polymarket is actively blocking known VPN IP ranges and is flagging accounts exhibiting signs of evasion. Users who maintain unusually large trading positions or who transfer money in rapid, high-value cycles may face requests for identity verification in order to comply with anti-money laundering (AML) regulations.
While Polymarket has maintained the ability to perform basic wallet-based trading using the USDC stablecoin on the Polygon blockchain for users in permitted regions, it appears that the platform is moving away from its previous stance of fully permissionless access. This shift differentiates its international platform from that of its chief competitor, Kalshi, which has yet to implement similar reforms. Permissioned access is becoming a prevalent trend across the crypto industry, particularly as many operations are increasingly centered around stablecoins and other methods of centralization.
Polymarket has separated its international operations from its U.S. arm, which is obligated to adhere to stringent Know Your Customer (KYC) regulations, particularly following its acquisition of a licensed derivatives exchange in 2025. In previous years, the provider faced legal challenges, including a $1.4 million settlement with the Commodity Futures Trading Commission (CFTC) in 2022 for operating unregistered binary options.
Geoblocking specific IP addresses is a traditional method to restrict access from users in countries that lack proper regulatory compliance. However, VPNs have made it manageable for users to route their connections through servers located in regions where access is permitted. This vulnerability in geoblocking has been critically noted in the actions of various crypto exchanges. For instance, Binance and KuCoin faced backlash and legal challenges for allowing users in the United States to trade without the essential KYC and AML checks. Notably, court documents revealed that KuCoin knowingly facilitated such operations, promoting the absence of KYC checks as a feature and attempting to obscure its U.S. presence. The CFTC has also highlighted instances where Binance provided guidance to U.S. users on how to utilize VPNs to evade detection.
Globally, regulatory bodies are increasingly divided on how to classify prediction markets, with some categorizing them as unlicensed gambling and others as unauthorized trading in derivatives. Spain recently instructed internet providers to block both Polymarket and Kalshi for operating without the necessary gambling licenses, which has ignited disciplinary proceedings expected to extend for three to four months. This recent action in Spain has added to a growing list of over 30 jurisdictions where prediction markets face restrictions or outright bans, including newly added nations like Indonesia, Argentina, Brazil, India, France, Belgium, Australia, and the United Kingdom.
In the U.S., the CFTC has filed a lawsuit against Minnesota following the state’s passage of a law criminalizing prediction markets. Kalshi has joined the legal battle, arguing that the Minnesota statute exceeds state authority and violates the Constitution by encroaching upon federally supervised derivatives markets.
Compounding this complex regulatory landscape, some jurisdictions have begun to consider stricter regulations concerning the use of VPNs for evading age restrictions on adult content and other online services. These proposed rules are shifting the legal responsibility onto app developers and website operators, compelling them to ensure that unauthorized access by designated groups is prevented. Critics, including the Electronic Frontier Foundation, caution that such measures could drive platforms to mandate real-world identity verification, effectively eradicating anonymous internet access for widespread services.
Utah has introduced new amendments aimed at online age verification, barring companies from assisting users in circumventing age checks via VPNs or similar technologies and placing the onus on platforms to control access attempts from within the state. Similar discussions regarding VPNs as potential loopholes have emerged in the United Kingdom, where they are perceived as undermining government-imposed content restrictions.
