Woofun AI reports that US-based participants constitute the largest political betting cohort on Polymarket, a phenomenon persisting even after the platform implemented strict access controls for American citizens. This dominance exists alongside the recent launch of Polymarket US, a distinct, regulated entity, yet the decentralized global platform continues to absorb massive volume from the very jurisdiction it officially excludes. The core paradox identified by blockchain research firm Allium is that blocking mechanisms have not eliminated US participation but rather shifted it offshore, making the United States the single largest political market by contract volume and wallet count on the global network.

The regulatory backdrop for this persistent activity stems from a 2022 settlement with the Commodity Futures Trading Commission, which compelled Polymarket to sever access for US users on its global platform. As part of this agreement, the company paid a $1.4 million penalty to resolve allegations of operating an unregistered derivatives exchange within the United States. Despite this legal resolution and the subsequent technical barriers erected to comply with the settlement, data indicates that the demand for prediction markets among American users has simply migrated beyond the reach of direct US oversight. The settlement was intended to create a firewall between the global decentralized protocol and domestic users, yet the market dynamics suggest this firewall is porous.

Trading behavior analysis reveals a distinct divergence in preferences between US users and the global user base, particularly regarding the nature of the events being wagered upon. Allium found that American participants show a pronounced interest in foreign conflict-related markets, with five of the top twelve markets by notional volume for the US cohort directly relating to the Iran war. Conversely, these users demonstrate significantly less engagement with election-related markets, a category that is explicitly permitted on regulated platforms like Kalshi and the newly launched Polymarket US. 'US money pours into foreign wars, lately Iran, and largely skips the elections the global crowd trades,' Allium noted, highlighting a strategic avoidance of domestic political outcomes in favor of international geopolitical instability.

External validation of these figures comes from a separate study conducted by Rutgers University statistician Harry Crane, which aligns closely with Allium's findings on the scale of US involvement. Crane estimated that approximately 30% of total trading volume on Polymarket originates from the United States, a figure that underscores the magnitude of the offshore activity.

Woofun AI data shows that between May 2025 and April 2026, individuals based in the US are projected to have moved between $10.6 billion and $26.7 billion through the platform. This massive capital flow occurred despite Polymarket's active efforts to block US-based IP addresses and virtual private networks, with researchers utilizing trade timing and market selection patterns to attribute specific transactions to US users.

Enforcement tactics have intensified as the platform attempts to close these loopholes, with reports indicating that Polymarket is actively clamping down on users attempting to bypass restrictions via VPN services. Reports from May indicate that the platform has begun blocking specific IP addresses associated with known VPN providers to prevent circumvention. Beyond the United States, the platform faces a complex web of regional restrictions, having been completely blocked in more than 34 countries, including Spain, where authorities cited a lack of necessary licensing as a precautionary measure.

Additionally, four jurisdictions including Singapore, Thailand, Taiwan, and Poland operate under a 'close only' status, allowing existing positions to be liquidated but prohibiting new trades, while four specific regions such as Ontario, Crimea, Donetsk, and Luhansk face localized blocks despite broader national availability.

The ongoing legal scrutiny surrounding Polymarket and its competitors like Kalshi suggests that the tension between decentralized access and regulatory compliance will remain a defining feature of the prediction market sector. As authorities in multiple jurisdictions investigate licensing gaps and enforcement capabilities, the industry faces a fragmented landscape where user behavior often outpaces regulatory frameworks. This marks a critical juncture where the efficacy of geoblocking is tested against the sheer volume of offshore capital seeking exposure to global events.