The Commodity Futures Trading Commission (CFTC) has fined popular crypto prediction market service provider, Polymarket, $1.4 million whilst also ordering it to shut markets that are not in compliance with regulations of the federal agency.<\/p>\n
According to a press release<\/a> issued by the foremost financial regulator, Blockratize, the parent company of Polymarket, was accused of failing to register as a designated contract market (DCM) and as a swap execution facility (SEF) thus it was ineligible to offer off-exchange event-based binary options contracts.<\/p>\n Per the press statement, Polymarket had been operating as an illegal events market while urging the public to \u201cbet on your belief.\u201d This action is a contravention of the CEA and CFTC regulations.<\/p>\n Polymarket made its name as a decentralized information markets platform that allows users to bet on the outcome of real-world events, such as national inflation rates, political elections, reported cases of COVID-19 and political nominations.<\/p>\n CFTC cited examples of some of these events on the site like: \u201cWill $ETH (Ethereum) be above $2,500 on July 22?\u201d; \u201cWill the 7-day average COVID-19 case count in the U.S. be less than 15,000 for the day of July 22\u201d; \u201cWill Trump win the 2020 presidential election?\u201d<\/p>\n Speaking on the development, Vincent McGonagle, the Acting Director of Enforcement at CFTC said \u201cAll derivatives markets must operate within the bounds of the law regardless of the technology used, and particularly including those in the so-called decentralized finance or \u2018DeFi\u2019 space.\u201d<\/p>\n CFTC conceded that the cooperation of the firm during its investigation played a role in the reduced penalty the New York-based firm has been asked to pay.<\/p>\n We\u2019re pleased to confirm that we've successfully agreed to a settlement with the CFTC, & are excited to move forward & focus on the future of Polymarket. <\/p>\n As per the order, the 3 markets lasting past 1\/14 that don't comply with the Act will be prematurely resolved. More soon — Polymarket (@PolymarketHQ) January 3, 2022<\/a><\/p><\/blockquote>\n\n
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