The U.S. Federal Bureau of Investigation conducted an early-morning raid on the residence of Polymarket Labs Inc. Chief Executive Office Shayne Coplan today, seizing his phone and electronic devices as part of an investigation into claims that the betting platform accepted trades from users based in the U.S.

Founded in 2020, Polymarket operates as a decentralized prediction market platform that allows users to bet on the outcomes of real-world events using cryptocurrency. The company’s platform uses the blockchain to provide transparent and efficient trading on various topics, from politics to sports, by crowdsourcing collective opinions. Users place bets using the USDC stablecoin to speculate on the likelihood of specific events.

The platform aims to harness the “wisdom of the crowd” by offering markets that reflect collective sentiment on current issues. Polymarket has gained significant attention for its high-accuracy predictions, particularly in the political sphere, despite regulatory scrutiny and its political betting — specifically, the recent U.S. presidential election and why it’s in the crosshairs of the U.S. Department of Justice.

While legal in much of the world, Polymarket is prohibited from allowing U.S.-based traders to make transactions on its platform as part of an agreement with the Commodity Futures Trading Commission reached in 2022. That agreement came about after the CFTC accused Polymarket of operating an unregistered prediction market platform.

Exactly what evidence the FBI and Justice Department have that shows that Polymarket was breaching the agreement is not clear. Coplan has not been arrested and nor has anyone else involved in the company.

Polymarket gained significant attention in the lead-up to the election as it predicted that then-candidate and now President-elect Trump would win the election, while at the same time, polls were claiming to show the race was too close to call. As it turned out, Polymarket correctly predicted the outcome.

In response to the seizure, Polymarket said in a statement that the company would “stand up for ourselves and our community” and alleged that the FBI search was politically motivated, Bloomberg reported. “Polymarket is a fully transparent prediction market that helps everyday people better understand the events that matter most to them, including elections,” the company added.

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