Polymarket, a New York-based decentralized prediction market, has now come under investigation from the United States Commodity Futures Trading Commission (CFTC). Based on an October 23 report from Bloomberg citing anonymous sources, the CFTC is now investigating whether Polymarket is letting its customers trade binary options and swaps that need to be registered with the financial regulator.
The CFTC is yet to confirm whether it is investigating the Polymarket’s platform. In that context, the prediction market is believed to have hired CFTC enforcement head James McDonald to handle this probe. One spokesperson for the platform said:
“Polymarket is firmly committed to complying with applicable laws and regulations; and to providing information to regulators that will assist them with any inquiry.”
This report also alleges that the firm has engaged the former director of the CFTC’s enforcement division, who is the current partner at legal firm Sullivan & Cromwell, to address the probe.
Polymarket hosts several novelty predictive markets that enable users to speculate on the outcome of the future events using the USD Coin (USDC) stable token. The platform does not take positions against its clients and hosts the smart contract interface enabling users to interact with the protocol.
The report states that the investigation comes as Polymarket is currently in talks to secure a new round of funding; with many anonymous sources alleging that the raise might see the company valued at nearly $1 billion.
Buy Crypto NowPolymarket Funding
In October last year, Polymarket secured a $4 million funding round that was led by Polychain Capital. The funding saw participation from Meltem Demirors, CoinShares CSO, AngelList CEO Naval Ravikant; and former Coinbase CTO Balaji Srinivasan.
Today, Polymarket is not alone in offering decentralized prediction markets. Augur is launching a Polygon deployment of its platform at the beginning of October. While Polymarket provides an eclectic range of markets including speculation on the Covid Case numbers; CryptoPunks floor prices, and Trump’s presidential prospects; Augur markets are now focused on sporting events and cryptocurrency price projection.
