Home News Crypto predictions platform Polymarket fined $1.4M by CTFC

Crypto predictions platform Polymarket fined $1.4M by CTFC

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Polymarket, a crypto prediction platform based in New York, has agreed to pay a $1.4 million punishment to the Commodity Futures Trading Commission (CFTC).

Polymarket is a decentralised platform that allows users to use binary options contracts to wager on the results of event markets such as pro-sports contests and political elections.

The CFTC said on Jan. 3 that it has filed and settled charges against Polymarket. Finding the platform to have operated an “illegal unregistered or non-designated facility” since June 2020.

Polymarket must pay a $1.4 million civil monetary penalty and wind back any markets on the platform that do not comply with CFTC and Commodity Exchange Act (CEA) requirements, according to the order. Polymarket responded on January 4th with a tweet that they were “eager to go forward”.

The CFTC stated that event market contracts backed by a pair of binary options “constitute swaps” within its authority. And that platforms providing market exposure must be regulated by both the CFTC and the CEA.

The CTFC’s acting head of enforcement, Vincent McGonagle, urged derivatives platforms to register with the agency. With a special focus on those in the decentralised finance (DeFi) sector:

“All derivatives markets, whatever of technology, must function within the confines of the law, including those in the so-called decentralised finance or ‘DeFi’ sphere.”

Polymarket, on the other hand, earned a reduced civil monetary penalty. As a result of its “substantial cooperation” with the platform’s inquiry, according to the CFTC.

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