Polymarket Faces Backlash Over TikTok Ban Prediction Market Resolution

Polymarket, a crypto-powered prediction platform, is under scrutiny from its users after the contentious resolution of a market predicting whether TikTok would be banned in the United States before May 2025.

The market, which attracted $120 million in trading volume, was resolved to “Yes” on January 20 after the U.S. Supreme Court upheld a law banning the app due to national security concerns.

The controversy stems from the timing and interpretation of the ban. On January 19, TikTok began displaying a notice to U.S. users stating the app would no longer be accessible, coinciding with the Supreme Court’s decision.

Biden Administration Cites ByteDance as National Security Threat in TikTok Ban

The Biden administration justified the ban, citing ByteDance, TikTok’s Chinese parent company, as a national security threat for allegedly collecting user data on behalf of a “designated foreign adversary.”

However, complications arose when President Donald Trump intervened just a day later, granting TikTok a 75-day extension to negotiate terms with ByteDance.

This led many Polymarket users to argue that the app was not effectively banned, as it remains operational for most Americans.

Dissent within the Polymarket community was immediate. A user named Sky questioned the outcome, stating, “The ban didn’t happen, and TikTok is working fine for most Americans. Trump gave it an extension literally live. So why is it 99% Yes?”

Others, like silkroad69, defended the resolution, noting that the law banning TikTok officially went into effect on January 19, regardless of temporary extensions.

The uproar escalated as some bettors accused Polymarket of manipulating the result.

A user named Spot called the decision “disgusting” and labeled the platform a “scam.”

A petition demanding accountability for alleged manipulation has since surfaced, though it has garnered fewer than 100 signatures.

Polymarket relies on UMA’s Optimistic Oracle (OO) to resolve disputes in its prediction markets.

However, in this case, the process bypassed UMA’s Data Verification Mechanism (DVM), a move that further fueled accusations of unfair practices.

This is not the first controversy Polymarket has faced. In 2024, disputes over the resolution of Ethereum ETF and Barron Trump-related prediction markets drew similar backlash, with accusations of inconsistency and manipulation.

Polymarket Seeks $50M in Funding to Enhance Operation

Despite the criticism, Polymarket is reportedly seeking $50 million in funding to enhance its operations and introduce tokens that allow users to validate outcomes.

In August, leading financial data and news service provider Bloomberg LP revealed that it aims to incorporate election odds data from the crypto betting platform Polymarket into its widely used Terminal.

Polymarket, a blockchain-based prediction market operating on the Polygon network, has become a prominent platform for tracking real-time election odds.

The platform allows users to bet on a wide range of event outcomes, leveraging transparent on-chain data and smart contracts for trade execution and payouts.

Last year, five United States Senators and three House representatives called for a ban on betting activities linked to the upcoming 2024 presidential election.

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