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forshaper
raddan
On the other hand, most of the companies registered in Delaware are not trying to dodge US federal regulations. Polymarket is prohibited from operating in the US market. Nevertheless they have a substantial customer base in the US, and the part left unsaid in the NPR story, is that they’re probably also headquartered in the US. Almost definitely a violation of either gambling or securities regulations.
trollbridge
They are often trying to dodge their local state’s regulations, though.
_--__--__
Incorporating in Delaware was initially attractive because of usury laws that matter to a small number of business sectors.
The charitable take is that most corporations want to comply with a state's regulations because unintentional compliance violations are painful and expensive, and it is relatively easy to be confident that you are compliant as a Delaware corp.
adrr
No. Its because has chancery court which is a court based on equity not a court based on common law.
dhosek
When I had a C-corp in the 90s for a magazine I was publishing, my dad’s cousin insisted that I should incorporate in Delaware or Nevada. The thing is that because I was operating in California, especially at the small scale that I operated, it did nothing for me at all really. I would still pay California taxes and be subject to California regulations. Mostly it would make a difference if I were sued.
(Obligatory disclaimer that these are ~30-year-old memories of some dumb 20-something’s understanding of the law at the time.)
panda-giddiness
Just to elaborate a bit: companies register in Delaware so that legal disputes will be resolved by the Delaware Court of Chancery [1]. Although there are more business-friendly states, the Court of Chancery draws from a much larger body of business-related case law than any other, making legal challenges more predictable. The purpose of registering in Delaware is not to avoid legal scrutiny altogether.
Needless to say, this is categorically different from a company "moving" to Panama, without even maintaining a physical presence there, for the express purpose of avoiding American regulators. It's a false equivalence.
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[1] https://en.wikipedia.org/wiki/Delaware_Court_of_Chancery
mywacaday
I used to work for a large financial services company who bought 4 storey office block and fitted it out with very small but with own door individual offices that had internet and a connected desk phone so that companies could rent them and say they had more than a box office address in that European capital, I never found out what the rent was.
fc417fc802
So what? As long as they make it clear to visitors that their product is not for use by US residents who cares if US residents choose to break the law? Or rather, shouldn't any ire be directed towards those consumers who knowingly violate the law as opposed to a company that only officially provides services where it is legal to do so?
pear01
Polymarket is already working on a full return to the US market aided by sympathetic policy changes of the current administration.
Additionally, the claim "most of the companies registered in Delaware are not trying to dodge US federal regulations" strikes me as dubious. Every company seeks to lower its regulatory burden. If they're not finding loopholes, then often they're the ones writing the regulations and funding congressional campaigns. I'm not sure the claim Polymarket is unique re its relationship to the government in this respect is credible. They seem to be working quite intimately with the current administration on returning from their Biden era "ban".
raddan
There’s dodging and then there’s _dodging_. If you are operating in a legal gray area, that’s an unsavory business practice that is, as you say, widespread. Then there’s operating illegally in full view of everybody. I do not personally ascribe to the idea that a thing is OK just because one is not currently being prosecuted. Polymarket (and Kalshi) is bad for the country, their claims to the contrary are highly dubious, and it’s a case where not only are they actually in the wrong, they are quite specifically legally wrong.
kelnos
> the claim "most of the companies registered in Delaware are not trying to dodge US federal regulations" strikes me as dubious.
Why would it? Choosing the state to incorporate in has very little to do with US federal regulations. If the US wants to come after your company for some reason, they file in federal court, and the state you're incorporated in is irrelevant.
When incorporating, you choose the state based on its business-related laws and how they might apply to your company. You choose based on the experience of their judicial system in handling business matters. You might choose because there are a ton of other businesses incorporated in that state, and that's created a lot of court cases and a lot of precedent that can give your own legal team more confidence in how different sorts of legal challenge might play out.
If you were trying to avoid US federal regulations, you might incorporate in Delaware for the simple reason that Delaware is a safe default, given how common it is for companies to incorporate there. Incorporating in an unusual state could raise an eyebrow here or there. But ultimately it's not going to matter all that much. And even if it's true that a federal-regulations-skirting company would have a measurable benefit to incorporating in Delaware, there's no reason to believe that lots of companies incorporated in Delaware are trying to skirt federal regulations. That's just an unfounded assertion.
As an aside, it's not true that every company wants to decrease its regulatory burden. Once a company gets large enough, lobbying for extra regulation can be a barrier to entry for possible competitors. Also consider that "reducing regulatory burden" doesn't necessarily mean doing something illegal. In the case of Polymarket, they probably are, but plenty of other companies find ways to reduce their regulatory compliance needs in perfectly legal ways.
fsckboy
>the claim "most of the companies registered in Delaware are not trying to dodge US federal regulations" strikes me as dubious
huh? you aren't making a coherent argument. registering in any US state you are still subject to the same federal regulations, Delaware is not different, it offers no shelter from federal regulations.
in fact, if it is not your primary state of operation, then it subjects you to federal regulations for interstate commerce where you might not otherwise be.
pseudohadamard
I am shocked, shocked to discover that a dubiously-legal gambling outfit is run from a front company in a tax haven.
Extropy_
They acknowledge this in the article as well, surprisingly enough.
> Corporate law experts say while there is nothing illegal about housing a business inside a shell company, the practice is often a strategic move to protect a firm's wealth or shield it against lawsuits and action from government regulators.
What is the thought process of someone writing this? Does this article have any meaningful or critical thought behind it?
janalsncm
It isn’t newsworthy for people who believe the laws around corporate transparency and accountability are good enough.
Many people do not, which is why it is noteworthy, even if it is standard.
horacemorace
They’re avoiding editorializing. PBS news has the same dry “facts only” flavor. Legitimate reporting takes the high road; corpo-media too often take the low road. Unfortunately human information consumers tend to gravitate toward sources of maximum opinion.
randallsquared
Do you think "housing a business inside a shell company" is not editorializing when referring (apparently) to running a company that has a registered agent in a normal, permissive jurisdiction like Panama, Ireland, or Delaware?
Exoristos
They're doing their part in keeping a spotlight on Polymarket. The content of the article is not irrelevant, but it is less important than the existence of the article.
forshaper
I guess we're scratching our heads, and even we clicked.
creatonez
It is indeed already normal for rich people to do things that are sketchy as hell.
Maybe let's make it not normal?
JuniperMesos
I really don't trust your definition of sketchy as hell and don't want it to have legal or normative force.
creatonez
For-profit companies jurisdiction shopping without any physical presence is so clearly sketchy that it's wild anyone could see it otherwise. I can't imagine a normal person not being shocked in disbelief when they first learn about the concept of tax havens.
otterley
You haven't heard their definition yet.
nullsanity
[dead]
Henchman21
Could you please define "sketchy" for the sake of this conversation?
tt24
Registered agents are sketchy now?
creatonez
If the only shell(s) for a business are in a completely different jurisdiction with no connection whatsoever to any of the humans involved in operating the organization... yes. It's an outrageous way to escape the force of the law that has been rubber stamped by corrupt politicians.
deckar01
> there was no sign of Polymarket, nor the entity it does business as
The law firm at that address was not their registered agent. Their ToS mandated arbitration with an entity that doesn’t exist.
alpb
this is a good explainer video that talks about why Polymarket maintains a Panama HQ instead of a US one and why it has two different sites (.us vs .com). https://www.youtube.com/watch?v=seNwZhK4UdA
tim333
It's not news. It's interesting because of Polymarket's size - $8bn traded in a month up 8x from a year back, controversy - $400k on military secrets, drama - FBI ramming the CEO's pad and the like.
See also: Polymarket gamblers threaten to kill me... 1090 comments https://news.ycombinator.com/item?id=47397822
If it was just your average company it wouldn't be very interesting.
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dweez
If you follow Apple's official address to a lawyer's office in Delaware, don't be surprised that Tim Cook isn't there to greet you.
kibwen
Apple is registered in California, as both their website ( https://investor.apple.com/faq/default.aspx ) and their most recent form 8-K ( https://d18rn0p25nwr6d.cloudfront.net/CIK-0000320193/beb2c24... ) confirm.
kjkjadksj
[flagged]
dewey
They have 6000 employees located in Ireland including most of their support staff for the EU. They just opened another office in Dublin. They are also there for 45 years already, so not sure where "just a po box" comes from.
https://www.siliconrepublic.com/business/apple-to-open-dubli...
rsynnott
Big PO box; it's a little under 100,000sqm.
undefined
fc417fc802
The issue wasn't that the CEO was missing when they dropped by the Panama address. Rather it was that the (supposed) registered agent didn't know who they were.
If I say "contact my lawyer" and you show up to his office and the receptionist informs you that I'm not a client ...
trollbridge
Indeed, their registered agent address is 1209 North Orange Street in Wilmington.
quietsegfault
So what? A registered agent is literally the agent registered to accept process service. The registered agent is clearly not the corporate headquarters, a branch office, or anything other than a business whose purpose is to accept lawsuits, subpoenas, and other legal and official notices.
trollbridge
Well, that's the same thing the NPR article is reporting on, which is the equivalent legal concept in Panamanian law.
Polymarket's actual offices are remote-first, but they have a small space set up in New York City which is the closest thing they have to an HQ. It's basically set up like a coworking / hotel sort of space.
EA-3167
For what it's worth the only "official address" I could find was Apple Park in Cupertino.
ares623
It's an interesting "problem". The cities we have now exist because businesses and people want to be located in the same geographical area to maximize, well, doing business.
Now the opposite is happening. Businesses have no incentive being located in the same physical area they do business in. In fact, they have opposite incentives. The closer they are to their customers and workers, the less they can do things with impunity.
NooneAtAll3
to be fair, empty non-existing official office is nothing new. iirc, Delaware has a warehouse that's official residence of hundreds of corporations (for tax reasons)
I don't understand the rest of the article, tho... It complains that company that (officially) left the US market and already blocks US ips from participating... isn't doing enough? Officially there's no ground to demand more
If you really want to solve the problem - start hunting down unofficial means. Investigate influencers that started mentioning Polymarket out of the blue. Look into news outlets that decided to start mentioning polymarket as supposed proxy of popular opinion. Start advertizing campaigns against gambling addiction the same way as against smoking
anikom15
It’s not for tax reasons. It’s for legal reasons. You can’t escape taxes just by putting your headquarters in a certain location, but where your registered agent is controls your jurisdiction for disputes.
balderdash
It’s such clickbait to purposely conflate the word headquarters with legal domicile / registered agent. I mean Garmin, Medtronic, Accenture, Aon etc are all non-us businesses but no one shows up in Switzerland looking for Garmin, they go to Kansas…
fc417fc802
But if you did show up to their Swiss address presumably the representative there would know who you were talking about and be able to confirm that they are in fact a client.
balderdash
Then why not write that story?
fc417fc802
What story? "Garmin registered agent successfully confirmed" seems much less likely to be of interest than "polymarket registered agent fails confirmation, possible fraud afoot".
Yizahi
Switzerland is a tax evasion heaven too. Companies don't go there for the "predictable legal framework" lol, they go there to do shady schemes of tax "optimization".
sidewndr46
Is that giant building you can see from the highway in Kansas their headquarters? I was surprised to see it.
Yizahi
Not the first time. Tether's "bank" for multiple years had been a tiny house at Bahamas, barely barely as big as a gas station shop. And supposedly it held 100+ billions real US dollars :) . These scammers aren't concerning themselves with even a false facade, as long as government explicitly allows them to operate. And no bribes... ahem... lobbying is involved.
ThomW
Why are Americans allowed to invest in a business that would be illegal if based in the US? Why can they be patrons? Idgi
kristopolous
Most of the things you buy are manufactured under conditions that aren't legal in the US as well.
It doesn't make it acceptable, just endemic
kube-system
Breaking the law doesn’t follow the transitive property. Many businesses that people interact with have done illegal things. You typically can do business with someone as long as you aren’t breaking the law in doing so.
fc417fc802
Why wouldn't they be allowed to? If (suppose) the UK completely banned the sale of tobacco under any circumstances should a UK citizen be forbidden from investing in a US tobacco company? Why?
Polymarket is forbidden to sell their product within the US. That doesn't mean they can't take investment from or employ or even be headquartered in the US.
fooqux
Isn't this grounds for having their domain name revoked?
fc417fc802
Presumably it's grounds for the registrar to send them a notice to update their information. But also having a domain name shouldn't require an impressum. The current domain registration system is complete BS.
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ChrisMarshallNY
So Polymarket is a Web3 outfit?
londons_explore
It might as well be a regular website. The crypto bit adds nothing since 99.9% of users just use the webUI.
undefined
jcgrillo
"Court filings show the law office also did work for FTX"
If the shoe fits..
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exogeny
Polymarket is based in NYC, in Soho, on Crosby Street. Knock yourself out if you want to go find anyone there.
OutOfHere
There is nothing to see here. Thousands of businesses, based both inside and outside the country, use a legal address where they don't have an office. Literally every out-of-state Delaware-registered firm does it.
skywhopper
Polymarket engages in scammy behavior?? Wait, isn’t that their entire business model?
EdwardDiego
The part where all their legal troubles went away when one of the President's sons became an "advisor" says "yes".
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I don't get it. Most companies registered in the state I live in, for example, are not actually located here. They simply receive mail through their registered agent there. Why would this be news?