JPMorgan Chase, the US banking giant, reportedly decided to sever its banking relationship with Polymarket in October 2025 due to concerns regarding regulatory issues tied to prediction markets. This decision was unveiled in a report by the Wall Street Journal, which cited unnamed sources close to the matter.
The sources did not elaborate on the specific regulatory concerns that influenced JPMorgan's actions, but they indicated that legal disputes involving prediction market operators are currently ongoing in over a dozen states. These states assert their right to apply gambling laws to regulate these market operators, while the operators maintain that their offerings do not qualify as gambling but rather as financial products, as indicated by federal regulators.
Despite the termination of their banking relationship, Polymarket maintains that its ties with JPMorgan are intact. A spokesman for Polymarket stated that the firm continues to have a close and active relationship with JPMorgan across various entities. Shayne Coplan, the CEO of Polymarket, has spoken at three JPMorgan events in the last year, emphasizing that any suggestion of a divide between the two parties is fundamentally misleading.
While JPMorgan has not commented on the reports, the Financial Times noted that Coplan was invited to a private banking conference by JPMorgan in February 2026.
The issue of debanking has sparked significant controversy in the financial sector recently. In August 2025, President Donald Trump issued an executive order aimed at banning the practice of debanking, which is often related to financial institutions cutting ties with clients deemed high risk. Legal experts have suggested that financial firms should brace for increased regulatory scrutiny over debanking activities directed at cryptocurrency or digital asset clients. Reports indicate that several banks opted to debank crypto firms during the Biden administration, citing mounting regulatory pressure.
In December, a House Financial Services Committee report pointed out that various government agencies utilized excessive discretion and aggressive enforcement actions to pressure banks into suspending services for at least 30 crypto companies. Polymarket, which operates on the Polygon blockchain and utilizes the USD Coin stablecoin for transactions and deposits, falls into this category.
Meanwhile, the Financial Times reported that JPMorgan may be considering underwriting a potential initial public offering for Polymarket. Bloomberg also revealed that Polymarket is in discussions to raise approximately $1 billion, which could boost its valuation to over $20 billion, a significant increase from last year's valuation of $9 billion. In October 2025, Polymarket announced a strategic investment of $2 billion from the Intercontinental Exchange, the parent company of the New York Stock Exchange, valuing the firm at $9 billion at that time.
In April, Polymarket entered another funding round that valued the company at $15 billion. Polymarket has experienced a busy summer, engaging in various legal battles and recently securing partnership agreements with the MLB’s New York Yankees and the ATP Tour, which governs men’s professional tennis. However, legal experts have cautioned that Polymarket and its competitors may need to distance themselves from sports contracts to avoid further legal challenges, as one lawyer noted that a platform dominated by sports betting cannot aptly call itself a prediction market.
