JPMorgan Cut Off Banking Services to Polymarket Last Year, Regulatory Concerns Serve as Best Excuse for Relationship Restructuring
According to the Financial Times, JPMorgan terminated banking services for the prediction market platform Polymarket due to regulatory concerns in October 2025, requiring it to seek another banking partner.
Polymarket has established a partnership with another unnamed bank.
Despite cutting formal banking ties, JPMorgan continues business interactions and invited Polymarket CEO Shayne Coplan to speak at a Miami private client meeting alongside former NFL player Tom Brady in February 2026.
Polymarket stated that both parties maintain a close and active relationship in areas such as multi-entity operations integration and customer fund flows.
The platform is seeking over $1 billion in financing, targeting a valuation of $20 billion, more than doubling from the previous round's valuation of about $8 billion in 2025.
Polymarket was banned from serving U.S. users in 2022 due to CFTC enforcement but returned to the U.S. market at the end of 2025 after regulatory easing and is currently facing lawsuits related to illegal sports betting in multiple states.
On the market side, regulatory uncertainty has prompted major banks to cautiously cut banking services while retaining investment banking opportunities, with funds flowing to high-valuation prediction market platforms. Beneficiaries are large investment banks with underwriting capabilities, while those under pressure are crypto and prediction startups relying on traditional banking channels.
Source: Public Information
ABAB AI Insight
JPMorgan has previously taken a cautious approach towards crypto and alternative trading platforms due to regulatory risks, similar actions can be seen in its account restrictions on certain crypto firms, while continuously positioning itself in investment banking for high-growth tech and fintech IPOs.
In terms of capital pathways, the bank avoids compliance risks by cutting off daily banking services but maintains relationships through client meetings and potential underwriting roles, aiming to capture fee income from Polymarket's future IPO while retaining a stake as its valuation rises from $8 billion to $20 billion.
Similar cases include large investment banks initially restricting then participating in financing for certain crypto exchanges. Currently, the prediction market is transitioning from a regulatory gray area to mainstream, with nominal trading volume exceeding $250 billion.
Essentially, this reflects a transfer of pricing power under regulatory changes: banks externalize compliance costs while capturing emerging market growth dividends through investment banking, redistributing risks and rewards across different business lines.
ABAB News · Cognitive Law
- Cutting off banking services does not equate to giving up investment banking fees.
- Regulatory concerns serve as the best excuse for relationship restructuring.
- High-valuation platforms can always find capital willing to take risks.