The Commodity Futures Trading Commission (CFTC) has fined decentralized betting market Polymarket $1.4 million for allegedly operating an “illegal unregistered or non-designated facility” since June 2020.
What Happened: According to a June 3 filing, the CFTC ordered Polymarket to pay a $1.4 million civil monetary penalty.
“All 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 ‘DeFi’ space,” said Acting Director of Enforcement Vincent McGonagle.
“Market participants should proactively engage with the CFTC to ensure that our markets remain robust, transparent, and afford customers the protection provided under the CEA and our regulations,” he added.
Polymarket is a decentralized platform that lets users bet on the outcomes of various events, ranging from elections to court cases, along with crypto-related price targets and coronavirus developments, all using cryptocurrency.
The most popular betting market on the platform concerned whether Donald Trump would be inaugurated for a second presidential term on January 20th, 2021. That particular market saw an overall trade volume of $30.2 million.
Other popular ongoing bets include the percentage of US COVID-19 cases that are likely to be the omicron variant, floor prices for NFT projects like Bored Ape Yacht Club, and price targets for Ethereum (CRYPTO: ETH), Polygon (CRYPTO: MATIC), and Terra (CRYPTO: LUNA).
Polymarket took to Twitter to report that the company had reached a settlement with CFTC and stated that they were “excited to move forward” and focus on the future.
We’re 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.
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
The CFTC also noted in the filing that the $1.4 million imposed monetary penalty had been considerably reduced in light of Polymarket’s “substantial cooperation with the Division of Enforcement’s investigation.”
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