Shake-up at Polymarket: World's largest bank cuts direct ties

The American banking giant JPMorgan Chase has severed its direct banking relationship with the popular prediction market platform Polymarket, the Financial Times reported. According to the report, the bank notified the company that it must find a new banking partner due to growing regulatory concerns surrounding the legality of prediction market activities in the United States and the oversight thereof. Polymarket has since transitioned to working with another financial institution, whose identity has not been disclosed.

In response to the report, Polymarket clarified that the relationship between the entities has not been completely severed, stating that it continues to maintain a "close and active relationship with JPMorgan across a variety of entities, operational integrations, and cash flow management."

Despite the cessation of direct account services, sources familiar with the details note that JPMorgan is interested in keeping an open channel with the company and aims to serve as the lead underwriter if Polymarket proceeds with an initial public offering (IPO).

The prediction market industry—which allows users to trade and risk money on the outcomes of political, economic, and sports events—has become a massive industry worth billions of dollars. Alongside its rapid growth, these platforms are at the center of legal battles and investigations by law enforcement and regulators in the US.

JPMorgan Chase is the world's largest bank by market capitalization, with a value estimated at approximately $970 billion. The bank leads by a significant margin over other giant banks in the United States and globally, such as Bank of America and major financial institutions from China and Europe.