Polymarket Requires Identity Verification Amid Sanctions and Legal Risks

According to The Information, Polymarket is strengthening its access control for restricted areas. The platform has started to severely crackdown on VPN bypassing behavior, including banning IP addresses identified as VPN services and intercepting accounts with unusual connection patterns.

Due to regulatory requirements and international sanctions compliance, the platform has prohibited users from 33 countries from participating in betting. Previously, Polymarket only required an email to register, without mandatory customer identity verification (KYC), in stark contrast to its competitor Kalshi.

Russian software developer Ruslan Kashaev is a typical case of such bypassing behavior: he developed and hosted an automated trading bot on Telegram, which attracted thousands of Russian-speaking users to trade on Polymarket and profited from charging fees for the use of the bot.

A Polymarket spokesperson stated that the company has permanently banned Kashaev's account and is conducting a thorough review of all his activities to strictly enforce policies for restricted jurisdictions. The company emphasized that it will hand over relevant illegal activities to law enforcement agencies while maintaining a “comprehensive market integrity framework.”

Additionally, Polymarket has linked identity verification to trading speed. Earlier this month, the platform launched an online identity verification portal where users can submit materials such as passports, driver's licenses, and proof of residence, and confirm that they are not from regions prohibited by the platform's terms of service, nor are they residents of countries under U.S. sanctions such as Russia, Syria, Cuba, and North Korea.

Submitting identity information is still not mandatory, but users who complete the verification can access the platform's server in the UK and gain a trading speed several milliseconds faster than unverified users. For third-party developers and automated traders who rely on APIs, this difference in latency can directly affect the success or failure of specific trading strategies.