Crypto Prediction Marketplace Platform Polymarket Moves With CFTC For $ 1.4 Million

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Polymarket, a blockchain-based prediction market platform, has entered into a deal with the US Commodity Futures Trading Commission.

In an announcement released on Monday, the CFTC said the settlement was intended to “offer binary options contracts based on over-the-counter events and not gain designation as a designated contract market (DCM) or registration. as the Swap Execution Facility (SEF) “.

As part of the settlement, Polymarket agreed to pay $ 1.4 million, remove non-compliant marketplaces from its website, Polymarket.com, and “cease and desist from violating CEA and CFTC regulations, as it is invoiced ”.

As previously reported by The Block, Polymarket’s venture-backed platform uses smart contracts to allow users to bet on the outcome of events, such as last year’s presidential election. Bets are placed using the USDC stablecoin. Still, according to the settlement order released on Monday, “[t]Products traded on Polymarket are swaps “under US federal law.

In the Settlement Order, the CFTC noted that “by January 14, 2022, the Respondent will cease offering trading access to the marketplaces posted on Polymarket.com, unless such offer, solicitation or trading complies with applicable law and Commission regulations, and will facilitate the resolution (i.e. phase-out) of any marketplaces posted on Polymarket.com that do not comply with the law and the applicable Commission regulations. “

“No later than January 24, 2022, Polymarket will certify to the Commission that it has fulfilled these commitments and has made funds available for full reimbursement by market players,” the order continues.

“All derivatives markets must operate within the limits of the law, regardless of the technology used, and in particular those of the so-called decentralized finance or ‘DeFi’ space,” said the acting director of the Law Enforcement Vincent McGonagle in a statement. “Market participants should proactively engage with the CFTC to ensure that our markets remain strong, transparent, and provide clients with the protection afforded by the CEA and our regulations.”

In its statement, the CFTC noted the startup’s “substantial cooperation with the Enforcement Division’s investigation into this case in the form of a reduced civil penalty”.

In a statement posted on Twitter, Polymarket said, “We are delighted to confirm that we have reached an agreement with the CFTC, and are delighted to move forward and focus on the future of Polymarket. the order, the 3 contracts having lasted after 1/14 which do not comply with the law will be resolved prematurely. More soon. “

The announcement represents the CFTC’s first coercive action in the crypto space for 2022. The move comes weeks after the agency’s new head, Rostin Benham, was confirmed by the Senate for the post. Benham, commissioner since 2017, served as interim president since last January.

During his confirmation hearings, Benham urged Congress to provide the CFTC with greater powers to oversee the crypto market.

Bloomberg first reported last fall that Polymarket was under investigation by the CFTC.

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