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In a surprising turn of events, the FBI conducted a pre-dawn raid at the Manhattan residence of Shayne Coplan, the founder of the election gambling site Polymarket. The raid is part of a broader criminal investigation by the Department of Justice into allegations that the startup accepted bets from U.S. users, potentially violating an earlier agreement with the government.

Sources revealed that federal agents, armed with a court-authorized search warrant, confiscated Coplan’s electronic devices, including his phone, during the raid. Despite the aggressive action, Coplan remains uncharged and was not arrested, according to a Polymarket spokesperson.

Polymarket, which accurately predicted Donald Trump's significant win over Vice President Kamala Harris in the recent election, has vowed to defend itself and its community. The company describes itself as a transparent prediction market aiming to help people better understand significant events through betting.

The raid has drawn allegations of political retribution, especially given Polymarket's connections with prominent Republican figures, including financial backers like Peter Thiel. Coplan echoed these sentiments in a post on social media, criticizing the current administration for targeting companies associated with their political adversaries.

Adding fuel to the speculation, a former Polymarket employee reported that it was widely known how U.S. users could evade the betting ban by using virtual private networks (VPNs). This issue is significant, given that Polymarket had agreed to a U.S. ban on taking bets and was fined $1.4 million for not registering with the Commodity Futures Trading Commission in 2022. Despite these restrictions, the site reportedly handled around $3.7 billion in election bets.

Further complicating matters, Polymarket has faced additional scrutiny from France's gambling regulator, Autorité Nationale des Jeux, which is investigating the legitimacy and compliance of the platform under French gambling laws.

The company has also been implicated in trading controversies, including an incident where a mysterious French trader, known by the alias Théo, made a substantial profit of $85 million from Trump bets post-election. The trader denied any attempt to influence the election, stating his actions were purely profit-driven.

Given the unfolding investigation and the complex web of political and legal challenges, Polymarket finds itself in a precarious position, with both U.S. and French authorities closely examining its operations.