Four years after paying a $1.4 million settlement to the CFTC and agreeing to block American users, Polymarket’s offshore platform is still processing billions in trades from the very country it’s supposed to exclude.

In April 2026, Polymarket International, the company’s offshore arm, recorded $9 billion in trading volume. Its regulated US counterpart? Just $1.3 billion. That’s roughly a 7-to-1 ratio in favor of the platform Americans aren’t supposed to be using.

The geo-fence that couldn’t

Polymarket settled with the Commodity Futures Trading Commission in 2022 for $1.4 million after regulators determined the platform was operating as an unregistered exchange. Part of the deal required Polymarket to geo-block US users from its prediction markets.

The offshore platform, linked primarily to jurisdictions like Panama, has become the real center of gravity for the company’s business. VPNs and workarounds have allowed US-based traders to access higher-volume markets covering everything from elections to geopolitics to sports outcomes. Polymarket has reportedly initiated measures to crack down on VPN usage and enforce stricter identity verification, but the volume numbers tell a different story about how effective those measures have been.

Polymarket’s two-track strategy

In 2025, the company acquired QCEX, a CFTC-licensed exchange, for $112 million. The acquisition was designed to give Polymarket a legitimate pathway into the US market, complete with the regulatory blessing it lacked the first time around.

The resulting product, Polymarket US, launched as the company’s compliant domestic offering. But with $1.3 billion in April volume compared to $9 billion on the international side, the compliant version looks more like a regulatory checkbox than a thriving marketplace.

Polymarket has also faced scrutiny over potential insider trading on its geopolitical markets, though the company has cooperated with authorities during those investigations.

A booming industry with a compliance headache

The broader prediction market industry has exploded, with combined volumes across platforms exceeding $44 billion in 2025. By early 2026, monthly volumes were running above $20 billion, driven by interest in election cycles, geopolitical events, and sports betting.

The same dynamic played out with offshore crypto exchanges for years. Binance famously maintained a separate “Binance.com” for international users while launching a smaller, regulated Binance.US entity. American traders found their way to the larger platform anyway, leading to years of regulatory conflict.

What this means for investors and the market

The $9 billion offshore figure versus $1.3 billion on the regulated side tells a clear story about where liquidity lives. For institutional investors or funds looking at prediction market exposure, the volume disparity creates a real dilemma. The deeper markets carry legal risk for US participants, while the compliant markets may not offer enough depth to execute meaningful strategies.

Competitors like Kalshi, which has pursued a regulation-first strategy in the US, are watching closely. A Polymarket crackdown could funnel significant volume toward compliant domestic alternatives.