Cryptocurrency betting site fined by CFTC
The Commodity Futures Trading Commission (CFTC) has filed an order that requires Polymarket to pay $1.4m in fines and cease certain activities.
Registered in Delaware, Polymarket is a site that offers off-exchange, event-based binary options contracts. In other words, the website lets users make simple yes or no bets with cryptocurrencies on numerous and even random topics.
After being investigated, Polymarket was found to have been operating an illegal unregistered or non-designated facility for even-based binary options online trading contracts, also known as “event markets,” since June 2020.
The CFTC stated the website has “failed to obtain designation as a designated contract market or registration as a swap execution facility.” More precisely, the website allowed people to make bets without being registered and it must cease offering access to offending markets by 14 January.
According to the CFTC, market events contracts constitute swaps under its jurisdictions, therefore only registered exchanges are allowed to offer them.
The Trading Commission added that it recognises Polymarket’s substantial cooperation, which is why the penalty was reduced to a civil monetary form.
The Commission’s Acting Director of Enforcement, Vincent McGonagle, said in a statement: “All derivatives markets must operate within the bounds of the law regardless of the technology used, and particularly including those in the so-called decentralised finance or ‘DeFi’ space.
“Market participants should proactively engage with the CFTC to ensure our markets remain robust, transparent and afford customers the protection provided under the CEA and our regulations.”
The CFTC urges customers and other individuals to report any suspicious activities or information, such as possible violations of commodity trading laws to the Division of Enforcement.
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