The world of prediction markets, where users wager on the outcomes of future events, has long been a frontier of financial innovation and regulatory challenge. Polymarket, a prominent player in this nascent industry, has found itself at the center of a whirlwind of controversies, from allegations of insider trading involving a U.S. Special Forces soldier and a Google employee, to the dramatic FBI raid on its CEO’s apartment. However, beneath these sensational headlines lies a more intricate and potentially consequential peculiarity: the operational structure of its Panamanian subsidiary, Adventure One QSS, and its apparent deviation from the terms of a significant federal settlement.
A Complex Corporate Architecture Designed for Compliance
Polymarket’s current operational framework is a direct consequence of a 2022 settlement with federal regulators. The Commodity Futures Trading Commission (CFTC) declared that Polymarket was functioning as an unlicensed derivatives exchange, leading to its de-platforming from the U.S. market and a prohibition on serving U.S.-based customers. In response to this regulatory action, a corporate entity named Adventure One QSS was established in Panama. This offshore company was intended to assume operational responsibilities for Polymarket’s core prediction market platform, thereby creating a separation from its U.S. operations. Subsequently, in 2025, Polymarket US was launched, overseen by QCX LLC, to legally cater to American users. This bifurcated structure was ostensibly designed to comply with the CFTC’s directive to cease operating as an unlicensed exchange within U.S. jurisdiction.
Unveiling the Discrepancy: Panamanian Operations with a U.S. Footprint
Despite the clear mandate to separate U.S. operations from the offshore entity and establish a genuine presence in Panama, an investigation by WIRED has brought to light concerning discrepancies. Former Polymarket employees have revealed that a significant portion of Adventure One QSS’s staff, responsible for crucial technical and operational functions related to the offshore platform, resided and worked within the United States, including from the company’s Manhattan-based headquarters.
These employees, according to former staff, did not travel to Panama, report to any supervisors in the country, or engage with colleagues based there. Their accounts suggest a scenario where the designated Panamanian entity functioned more as a corporate shell, with its actual workforce dispersed across various international locations, notably including the U.S. This arrangement raises critical questions about whether Adventure One QSS genuinely constituted an independent, offshore operation as envisioned by the settlement agreement.
The Genesis of the Settlement: A Crackdown on Unlicensed Derivatives
The 2022 settlement between the CFTC and Blockratize, a corporate entity linked to Polymarket, was a significant event in the evolving landscape of financial regulation for digital assets and novel trading platforms. The settlement levied a $1.4 million fine against Blockratize and, more importantly, mandated the "winding down" of markets that violated the Commodity Exchange Act (CEA). The agreement also stipulated that the company must cease all activities that contravened the CEA and other Commodity Futures Trading Commission (CFTC) regulations.
This regulatory action stemmed from the CFTC’s increasing scrutiny of platforms offering derivative-like products without the requisite licenses and oversight. The core concern was the potential for market manipulation, inadequate consumer protection, and systemic risk associated with unregulated financial activities. For Polymarket, the settlement represented a pivotal moment, forcing a strategic restructuring to maintain its business while adhering to federal mandates.
Examining the Implications of the Offshore Structure
The placement of staff for Adventure One QSS in the U.S. carries substantial implications for the integrity of the 2022 settlement. Former CFTC legal professionals have voiced concerns about the transparency and enforceability of such arrangements. "We would have really liked to know that the people purportedly in Panama weren’t actually in Panama," one former CFTC lawyer stated to WIRED. The expectation under such a settlement is that the offshore entity would establish a substantive operational base, including personnel and infrastructure, in the designated foreign jurisdiction. The alleged presence of key personnel in New York, performing critical functions for the offshore platform, could be interpreted as a circumvention of the spirit, if not the letter, of the regulatory agreement.
A Shifting Corporate Landscape and Lingering Questions
Initial incorporation papers for Adventure One QSS, filed in 2021, did list Panamanian residents, including Mario Ernesto García de Paredes as the company’s "resident agent." Diana Munoz was briefly listed as president before being succeeded by Polymarket CEO Shayne Coplan, who is based in New York. Omar Camargo, also appearing to be based in Panama, was listed as secretary. However, García de Paredes did not respond to inquiries from WIRED, and Munoz and Camargo could not be reached for clarification. Notably, Munoz and Camargo have prior connections, appearing as executives in securities filings related to the Internet Art Foundation.
Further corroboration of a disconnect between the claimed Panamanian operations and actual U.S.-based staffing comes from previous reporting by NPR. An NPR investigation found that Polymarket’s purported headquarters in a Panamanian skyscraper was vacant and that the company lacked a demonstrable staff presence in the country. In stark contrast, the U.S.-based employees of Adventure One QSS were allegedly engaged and productive, with former staff describing a scenario where individuals "touching code," setting up event contracts, or otherwise managing the offshore platform were technically employed by Adventure One QSS. The perceived lack of a clear operational divide between the U.S.-based Blockratize and the offshore Adventure One QSS led to uncertainty among employees regarding the rationale behind the complex corporate structure.
Interconnectedness and Financial Investments
While Blockratize and Adventure One QSS are distinct entities, their operational entanglement is a subject of ongoing discussion. For instance, Intercontinental Exchange, the parent company of the New York Stock Exchange, announced a significant investment of up to $2 billion in Polymarket. However, this investment was channeled exclusively into Blockratize, not Adventure One QSS. This selective investment further underscores the perceived separation between the U.S.-focused entity and its offshore counterpart, even as former employees describe a lack of physical separation in their work environment. Adventure One QSS team members reportedly did not have permanent desks in the New York office, suggesting a project-based or task-oriented engagement rather than a fully integrated operational unit.
The Appeal of Panama and the CFTC’s Oversight
Panama is a jurisdiction frequently chosen by multinational corporations due to its favorable tax system, robust privacy laws, and streamlined incorporation processes. However, in Polymarket’s case, the establishment of Adventure One QSS was explicitly driven by the 2022 settlement with the CFTC.
Joseph Konizeski, former chief trial attorney in the CFTC’s Division of Enforcement, outlined the necessary steps for a legitimate offshore transition. "That would have required them to hire new staff offshore, move their corporate infrastructure offshore, and stop accepting funds from US customers," Konizeski explained to WIRED. The question remains whether the current operational setup, with U.S.-based staff handling key functions for the Panamanian entity, satisfies these stringent requirements.
The CFTC has declined to comment on Adventure One QSS’s structure and its compliance with the settlement. Polymarket also declined to provide a statement. While the CFTC has not formally accused Adventure One QSS of any wrongdoing, the agency’s current stance on employees of Panamanian entities operating from the U.S. remains unclear. Todd Phillips, an expert in financial services regulation, described the arrangement as "odd, even if it is legal."
Precedents and Shifting Regulatory Tides
The CFTC has a history of taking enforcement actions against companies that have purported to operate offshore without truly establishing an international presence. A 2021 complaint against WorldWideMarkets, a foreign exchange company, alleged that despite incorporating in the British Virgin Islands, the company was operating from an office in New Jersey. More recently, in 2023, the government initiated a landmark action against the cryptocurrency giant Binance and its founder, Changpeng Zhao, for operating an illegal digital assets derivative exchange and for failing to implement effective anti-money-laundering programs.
However, the regulatory landscape surrounding decentralized finance and prediction markets has seen shifts. Following a staff letter in May 2025 that altered the agency’s approach to foreign futures and cross-border swap rules, the CFTC dropped an investigation into Polymarket in July 2025 without bringing charges. This move signaled a potentially more accommodating stance from the agency.
Renewed Scrutiny and the Future of Polymarket
Despite the previous de-escalation, Polymarket has recently come under renewed scrutiny. A Wall Street Journal investigation into the company’s affiliate marketing practices, which detailed the creation of mock winning bets for influencer partners, has sparked significant backlash and calls for a federal probe. In the wake of this reporting, Polymarket announced plans to audit its promotional content. Concurrently, the Wall Street Journal reported that the CFTC is investigating Polymarket, a claim corroborated by sources speaking to WIRED, who confirmed the investigation is ongoing.
According to Jack Murphy, a former CFTC enforcement trial attorney, the current administration’s enforcement priorities have shifted away from cases solely focused on operating allegedly unlicensed exchanges. Instead, the CFTC’s Enforcement Division is reportedly prioritizing investigations involving "intentional misconduct" and focusing on "protecting retail traders." Murphy suggested that an investigation into deceptive marketing practices, such as those alleged against Polymarket, would align perfectly with these priorities, indicating a potential new focus for regulatory action. The complex offshore structure of Adventure One QSS, coupled with recent allegations of deceptive marketing, places Polymarket at a critical juncture, facing renewed questions about its operational integrity and adherence to regulatory frameworks.
