JPMorgan Chase (JPM) terminated its banking relationship with prediction-market platform Polymarket last year over regulatory concerns, the Financial Times reported Friday, citing people familiar with the matter.
JPMorgan notified Polymarket in October that it needed to find a new bank, according to the report. Polymarket is now working with another lender, although the identity of the bank was not immediately known.
At the time, Polymarket was barred from allowing US customers to use its platform following a 2022 enforcement action by the Commodity Futures Trading Commission over operating an unregistered derivatives trading platform, the report said.
Despite ending the banking relationship, JPMorgan has maintained ties with Polymarket, including inviting Chief Executive Shayne Coplan to speak at a February conference for private banking clients in Miami alongside former NFL player Tom Brady, according to the report.
JPMorgan is also interested in potentially securing an underwriting role if Polymarket pursues an initial public offering, the report said.
Polymarket said it continues to do business with JPMorgan across multiple entities and maintains a close relationship with the bank involving operational integrations and customer fund flows. JPMorgan declined to comment, according to the report.
The development highlights the regulatory and banking challenges facing prediction-market companies. Polymarket and rival Kalshi have faced legal challenges from more than a dozen US states over allegations that their platforms operate as unlawful sportsbooks. The companies maintain that they operate as exchanges rather than bookmakers.
Polymarket is seeking to raise more than $1 billion at a valuation of about $20 billion, which would more than double its roughly $8 billion valuation from a 2025 fundraising round, the Financial Times reported.