CFTC fines DeFi platform Polymarket $1.4 million

The U.S. Commodity Futures Trading Commission (CFTC) fined the prediction platform Polymarket $1.4 million for operating over-the-counter binary options trading without proper registration.

“Polymarket has offered more than 900 individual event markets since its inception, placing smart contracts on the blockchain to manage them. Polymarket creates, defines, supports and executes trading and settlement of binary options contracts on its site,” the press release says.

The CFTC added that “all derivative markets must operate within the law, regardless of the technology used.”

According to the release, cooperation with the regulator yielded a reduced penalty for Polymarket. The platform confirmed a “successful settlement” of the matter.

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

Polymarket allows bets on real-world events, such as the passage of an infrastructure package or the number of COVID-19 infections. Prices are determined using an automated market maker technology.

As a reminder, in December 2021 the new head of the CFTC became Rostin Behnam, who in October proposed expanding the agency’s powers to regulate cryptocurrencies in cryptocurrency regulation.

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