The Commodity Futures Trading Commission (CFTC) has ordered Polymarket – a decentralized platform that allows users to bet on the outcome of current events – to pay a civil fine of $ 1.4 million. The agency claimed the company had not applied for registration of a designated contract marketplace (DCM) or swap execution mechanism (SEF).
CFTC on the hunt again
According to a government agency announcement, Polymarket is also to “phase out” any markets posted on its website that do not comply with the Commodity Exchange Act (CEA) and CFTC regulations.
Acting Director of Enforcement – Vincent McGonagle – noted that all derivatives markets must operate within applicable legal requirements, regardless of the technology used. The executive said those in the DeFi space should even be watched with greater attention.
“Market participants must proactively engage with the CFTC to ensure that our markets remain strong, transparent and offer clients the protection offered by the CEA and our regulations,” McGonagle added.
After receiving the penalty, Polymarket accepted the CFTC settlement and is “excited to move forward” and focus on its future.
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.
In accordance with the ordinance, the 3 contracts having lasted after 1/14 which do not comply with the law will be terminated prematurely. More soon
– Polymarket (@PolymarketHQ) January 3, 2022
Built on the Ethereum network, Polymarket is a decentralized prediction marketplace that allows individuals to bet on the outcome of real world events. Before clients can start speculating, they need to deposit USDC into their wallet. Then they can stake the assets on the future outcome of hotly debated topics and earn profits if they are right.
Since its interception, the entity has offered more than 900 separate event markets. Among his most popular are: “Will Trump win the 2020 presidential election?” or “Will Ethereum be above $ 2,500 on July 22?” “
Previous charges of the CFTC
Polymarket isn’t the first crypto-related company to be fined by the CFTC. In August last year, the digital asset exchange – Bitmex – agreed to pay $ 100 million after the government agency accused the former of circumventing U.S. regulations. Specifically, the CFTC criticized the company for operating an unregistered derivatives platform.
Shortly after, the Commission imposed a civil fine of $ 1.25 million on the Kraken trading platform. She claimed that the latter allegedly allowed American customers to access products that were prohibited to them.
Subsequently, last October, the CFTC ordered Tether and Bitfinex to pay a total of $ 42.5 million for breaking the law. The organizations were also ordered to refrain from any further violations of the CEA.
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