ESMA warns Polymarket, Kalshi may need EU approval

The European Securities and Markets Authority (ESMA) warned that major prediction markets Polymarket and Kalshi generally lack the necessary approvals to offer services to EU users. Marketing and selling event contracts in the EU typically requires EU authorization, which these platforms do not currently possess. While Polymarket and Kalshi restrict trading in some EU countries, other member states remain unaffected by these restrictions. This situation raises concerns about unauthorized service provision and potential violations of existing regulations that limit such trading for retail investors. ESMA also questioned the ability of these platforms to effectively block users who conceal their real location using a virtual private network (VPN). Additionally, the report indicated that event contracts might be subject to the EU's binary options ban, MiCA, other crypto regulations, or national gambling laws.

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