Why Romania Banned Polymarket: according to the October 30 press release from the ONJN, the Romanian National Office for Gambling decided during its October 29 meeting to sanction Polymarket, both due to the controversy surrounding its involvement in the recent elections and because its legal framework resembles unlicensed gambling more than trading. The company, now blocklisted, is no longer permitted to operate legally in Romania.
What is Polymarket
Polymarket is a company founded in 2020 by Shayne Coplan. It describes itself as the largest prediction market, allowing users to bet on future events. The platform enables users to buy and sell shares representing the outcomes of future events, priced in USDC, and to bet peer-to-peer against one another. The company has sparked significant controversy because its status as a “prediction market” is not clearly defined. Although it does not classify itself as a gambling platform, many regulatory authorities have treated it as one. For example, the CFTC imposed a $1.4 million civil monetary penalty on the company.
2024 Presidential Election and Bucharest Mayoral Election
According to the press release, which cites information provided by the platform itself, transactions on Polymarket exceeded 600 million dollars during the last presidential election (won by Klaus Iohannis and annulled shortly afterwards), and more than 15 million dollars during the most recent municipal election in Bucharest.
The Romanian Legal Framework
According to Romanian legislation, gambling constitutes a state-regulated monopoly, and external operators may only provide gambling services if they obtain a state-issued license. The ONJN states that Polymarket’s activity cannot be classified as trading and, referencing similar measures adopted in countries such as Poland and Thailand, considers Polymarket to be a gambling platform falling under the Emergency Ordinance 77/2009, which regulates gambling activities.
Moreover The office pointed out several dark spots: the absence of local tax reporting, the lack of player-protection measures (self-exclusion, age and funds verification), failures in anti-money-laundering procedures, and a lack of transparency regarding activities. These deficiencies weighed heavily in the decision.
Direct Consequences for Polymarket and the Crypto Ecosystem
While being blocklisted, Romanian authorities ordered internet providers to block access to the platform for Romanian residents. This decision highlights several key challenges for the crypto ecosystem as a whole :
- The unclear legal framework surrounding “prediction markets” and gambling in many jurisdictions;
- Increasing regulatory pressure on crypto-related activities, with traditional rules being applied to new forms of digital economic activity;
- Risks for users, including restricted local access, geographical barriers, and regulatory pressure on operators concerning their legal status.
Conclusion
While many initiatives combining crypto and real-world applications are thriving, the legal frameworks surrounding cryptocurrencies remain fragile, which can lead to abuses and significant harm. For new opportunities in the sector to flourish, greater regulation and transparency around blockchain technologies are needed.
About Coinaute
Coinaute is a digital media platform specialising in news and analysis on cryptocurrencies, blockchain, artificial intelligence and finance. Its mission is to keep readers informed with market updates, guides and insights within the Web 3.0 space.
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