Polymarket raises new concerns in the UK. The predictive markets platform records nearly $77,500 in bets on the failure of major banks, including HSBC and Lloyds. Faced with the risk of manipulation and bank panic, a British MP is calling for intervention from regulators. Polymarket, for its part, defends the usefulness of these markets.
In brief
- Around $77,500 has been wagered that major banks will fail by the end of the year, including HSBC, Lloyds, JPMorgan and BNP Paribas.
- MP Bobby Dean calls on British regulators to seize their American counterparts and evokes a risk of a bank run.
- The FCA says it communicates with international regulators; HSBC and Lloyds have not commented.
An MP calls for intervention
Prediction markets are gaining ground, but their development raises new regulatory questions. After the European stance against Polymarket and Kalshi hardened, betting on bank failures is now attracting the attention of British authorities.
On Polymarket, users pledged nearly $77,500 to possible bankruptcybefore the end of the year, of several major international banks, including JPMorgan, BNP Paribas, HSBC and Lloyds.
This situation worries Bobby Dean, Liberal Democrat MP and member of the British Treasury Committee. He believes that the platform’s surveillance flaws could encourage manipulation and amplify panic movements on the markets.
The MP therefore asks British regulators to get closer to their American counterparts. For its part, the Financial Conduct Authority (FCA) indicates that it is already communicating with international authorities to preserve the integrity of the markets. The Bank of England is also monitoring emerging risks. For the moment, HSBC and Lloyds have not reacted.
Polymarket defends its market
Polymarket refuses alarmist reading. “ Information in these markets is already public », argues its legal director Neal Kumar, for whom banks and funds have long had access to CDS markets. Expanding this access even contributes to the fight against disinformation, he adds.
Critics, however, are pouring in, including the United States. The FDIC, the American deposit insurance company, looked into these contracts and the ethical rules of its employees this fall, according to Bloomberg. Its former president, Sheila Bair, believes that they have no social value and that they encourage actors to stir up rumors and panic.
Senator Elizabeth Warren speaks of a “wild west” riddled with manipulation. Kalshi, the regulated competitor, does not offer such contracts and considers them “in bad taste”.
An issue that goes beyond the United Kingdom
Europe is moving forward in parallel. ESMA warned in September that prediction markets are plagued by insider trading, citing wallets created just before the conflict against Iran in February, or the American soldier indicted for betting on the arrest of Nicolás Maduro.
The platform is already blocked in France, where the 2027 presidential election attracts bets via bypasses. Faced with criticism, the platform introduced voluntary deposit limits and blocks.
The fact remains that the legitimacy trial is also played out on words. Defenders see it as a counter to rumors, detractors see it as a moral hazard. A duel that the prediction market news documents every week.
The amounts remain modest compared to traditional financial markets. It is the trajectory that worries us, more than the current size. The legal setbacks are piling up, like Kalshi’s recent defeat on appeal over his sports contracts. The next important decision could come from Washington, where the CFTC asserts its jurisdiction in the face of elected officials who are demanding tougher rules.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
