Prediction market platform Polymarket is considering making user identity verification, or KYC, mandatory.

A report by The Information cited by blockchain media outlet Cointelegraph on May 27 said Polymarket is reviewing its anonymity-focused operating policy as its legal risks have grown, including controversies over sanctions violations and illegal gambling.

The central question is whether to introduce user verification at the level of KYC. Polymarket has operated in a way that allows users to access the platform and trade under pseudonyms. Critics have said that while the structure keeps user identities from being publicly disclosed, it can increase legal liability if funds flow into contracts tied to controversial events.

As of May 27, Polymarket had geoblocked access in 35 countries. Blocked countries include Iran, Russia and North Korea, which are subject to sanctions by several countries for reasons including military conflicts.

User anonymity has already surfaced as an issue in a real case. It later emerged that a U.S. soldier bet on a contract linked to the arrest of Venezuela's President Nicolas Maduro and received about $400,000 in payouts amid suspicions that classified information was used. The structure that allows users to operate under pseudonyms has again been highlighted as potentially making it difficult to filter out such trades in advance.

Pressure from countries is also growing. Several countries view Polymarket as a service that may involve illegal gambling and have blocked or restricted access. Changes in this regulatory environment are part of the backdrop to Polymarket's review of adopting KYC.

In the United States, political debate continues over jurisdiction for prediction markets. U.S. President Donald Trump posted on his social media platform Truth Social on May 26 that the U.S. Commodity Futures Trading Commission should have "exclusive jurisdiction" over prediction markets. The view aligns with the stance of CFTC Chairman Michael Selig, who has clashed with state authorities that have cracked down on platforms such as Polymarket and Kalshi.

Still, the U.S. Congress is focusing on potential conflicts of interest rather than deregulation. U.S. House members said they had launched an investigation into Kalshi and Polymarket, citing the risk of insider trading by elected officials. Polymarket has also listed several event contracts linked to war-related issues involving the United States, Israel and Iran.

If Polymarket introduces KYC under these circumstances, the structure of the service itself could change. Anonymity may decline, but it would be read as a signal that it is adjusting its operations to reduce exposure to sanctions breaches and illegal transactions. Openness and user access for prediction market platforms, however, could face some constraints.

Polymarket's KYC review shows prediction markets have entered a stage where operating solely on pseudonym-based accessibility is difficult. As service expansion and regulatory responses are required at the same time, user verification systems are emerging as a key variable in platform operations.