Polymarket, the prediction market that recently drew FBI scrutiny, operates through a Panamanian corporate structure so opaque that even former employees struggle to understand it. The arrangement raises questions about transparency and compliance—core concerns for any payment service provider evaluating high-risk merchant relationships.
For direct-acquiring PSPs serving card-not-present verticals, this is a cautionary tale. Murky corporate structures complicate everything from KYC and beneficial ownership verification to transaction monitoring and regulatory reporting. When a merchant's own team doesn't understand the entity hierarchy, it signals potential compliance blind spots that can cascade into payment processing risk. In verticals like crypto on-ramps and high-risk subscriptions, where Velocity operates, thorough due diligence isn't just about ticking boxes—it's about understanding the actual money flows, entity structures, and settlement chains. The Polymarket case underscores why modern PSPs need comprehensive onboarding that goes beyond surface-level checks, particularly when merchants operate across jurisdictions or use offshore entities. Clear corporate transparency isn't just good governance; it's foundational infrastructure for sustainable payment processing.
Read the full report at Wired Business.