Brandon Fletcher
Polymarket is actively targeting users who utilize VPNs to circumvent its geoblocking restrictions. The platform now blocks specific IP addresses associated with VPN services and may require users to verify their identities, according to a report from The Information. This initiative arises as the company confronts increasing legal and regulatory challenges globally, including outright prohibitions in nations such as Spain and Indonesia. VPN service providers are also experiencing heightened regulatory scrutiny in states like Utah and in the United Kingdom.
Polymarket’s revised strategy integrates technical barriers with selective identity verification processes to prevent users from bypassing location limitations. The company reportedly blocks known VPN IP ranges completely and flags accounts that exhibit signs of evasion. Users engaging in unusually large trades or those transferring funds in rapid, high-value transactions may be prompted to complete identity verification to comply with anti-money laundering regulations. While basic wallet-based trading using the USDC stablecoin on the Polygon blockchain remains available to users in permitted regions, the platform appears to have moved away from its previous model of fully permissionless access. This shift is significant, as it differentiates the international version of its platform from its main competitor, Kalshi. This trend towards more regulated access is increasingly prevalent across the cryptocurrency sector, as much of the related activity is centered around stablecoins and other centralized mechanisms.
Importantly, Polymarket maintains a clear distinction between its international operations and its U.S. division, which mandates full Know Your Customer compliance following the company’s acquisition of a licensed derivatives exchange in 2025. Before this acquisition, the prediction markets provider settled a $1.4 million dispute with the CFTC in 2022 for operating unregistered binary options.
Geoblocking specific IP addresses is a common method used to prevent individuals in restricted countries from accessing financial platforms that lack appropriate regulatory authorization or compliance. VPNs allow users to route their connections through servers located in permitted regions, making purely IP-based blocks ineffective without collecting personal information from users. This limitation of geoblocking has been exploited by various cryptocurrency exchanges. For example, both Binance and KuCoin faced significant backlash and formal charges for permitting U.S. users to trade without the necessary KYC and AML checks. Court documents reveal that KuCoin knowingly allowed U.S. customers to operate without identity verification, promoted the absence of KYC as a selling point, and took measures to conceal their presence. The CFTC has also highlighted instances where Binance provided U.S. users with instructions on how to use VPNs to evade detection.
Regulators globally are increasingly debating how to classify prediction markets, with some viewing them as unlicensed gambling while others consider them unauthorized derivatives trading. Recently, Spain instructed internet service providers to block both Polymarket and Kalshi due to their operation without the necessary gambling licenses and failure to implement adequate protections for minors and self-excluded bettors. These blocks will remain in place during the disciplinary proceedings expected to last three to four months.
With Spain’s decision, more than 30 jurisdictions now impose restrictions or outright bans on prediction markets. Recent additions to this list include Indonesia, which took action earlier this week, as well as Argentina, Brazil, India, France, Belgium, Australia, and the United Kingdom. In the United States, the CFTC has filed a lawsuit against Minnesota after the state enacted a law criminalizing prediction markets. Kalshi has also joined the legal challenge with its own federal lawsuit, arguing that the Minnesota statute exceeds state authority and violates the Constitution by interfering with federally regulated derivatives markets.
Simultaneously, some regions are considering stricter regulations on VPNs used to bypass age restrictions for adult content and other forms of online regulation. Current discussions focus on shifting legal responsibilities to app developers and website operators, compelling them to prevent unauthorized access by targeted demographics. Critics, such as the Electronic Frontier Foundation, caution that this approach may force platforms to require real-world identity verification for users, effectively eliminating anonymous internet access for numerous services.
Utah’s new Online Age Verification Amendments prohibit companies that host content harmful to minors from assisting users in circumventing age checks through VPNs or similar tools. platforms are held accountable for access attempts originating from within the state, regardless of masking technologies employed. Similar discussions are emerging in the United Kingdom, where officials have labeled VPNs as loopholes that undermine content restrictions.
Daniel Mercer
