Decentralized Prediction Platform Polymarket Under Investigation By CFTC
Decentralized prediction market Polymarket has come under investigations from the U.S. Commodity Futures Trading Commission (CFTC) on whether the platform is allowing its customers to trade binary options and swaps that should be registered with the financial regulator.
Polymarket Under Investigation By CFTC
According to a report from Bloomberg citing anonymous sources, the CFTC is investigating the decentralized prediction market Polymarket. Reportedly, the derivatives regulator is "investigating whether Polymarket is letting customers improperly trade swaps or binary options and if it should be registered with the agency."
“Polymarket is firmly committed to complying with applicable laws and regulations and to providing information to regulators that will assist them with any inquiry,” a Polymarket representative said.
The report noted that the company has engaged the former director of the CFTC’s enforcement division and current partner at legal firm Sullivan & Cromwell, James McDonald, to address the probe.
Polymarket allows users to place speculative bets on certain outcomes, using the stablecoin USDC as a means of transacting where users can bet on outcomes by purchasing contracts that are cleared on the Ethereum network. The platform does not take positions against its customers but hosts the smart contract interface allowing users to interact with the protocol.
Polymarket Close to Being a Crypto Unicorn
The investigation comes as Polymarket is in talks to secure a new round of funding, with anonymous sources claiming the raise could see the firm valued at close to $1 billion. That would place the firm among the ranks of a growing number of crypto-focused unicorn startups since the beginning of the year.
Bloomberg further noted that Polymarket has seen the trade of about 4 billion shares since its launch in June 2020. In October 2020, Polymarket secured a $4 million funding round led by Polychain Capital that also saw participation from CoinShares CSO Meltem Demirors, former Coinbase CTO Balaji Srinivasan, and AngelList CEO Naval Ravikant.
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