The US Commodities and Futures Trading Commission has been agile in promoting investor protection and ensuring compliance from firms offering financial services that fall under its regulations. Details have now emerged that this regulator could be investigating the operations of Polymarket.
Polymarket is a decentralized prediction market-based in New York. A report published by Bloomberg has now revealed that this platform could be under investigation over some of its services.
CFTC Investigations into Polymarket
The report published by Bloomberg on October 23 states that the financial market regulator was looking into the platform to establish whether it was offering binary options and swaps. If Polymarket is found to be offering these services, it needs to register with this regulatory body. However, there is no official communication from CFTC to show that the regulatory body is indeed investigating Polymarket.
On its end, Polymarket stated that “Polymarket is firmly committed to complying with applicable laws and regulations and to providing information to regulators that will assist them with any inquiry.”
The report further notes that Polymarket has sought the legal services of Sullivan & Cromwell, a legal firm where James McDonald, the former director of CFTC is a partner. This legal firm will address the probe of the CFTC against Polymarket.
While it is not clear what the CFTC’s investigations are about, there are claims that it could be because of binary options and swaps. Polymarket is a platform that allows users to speculate on future events in the financial markets using the US coin stable coin.
Investigations Come amidst Growth in Polymarket
The recent investigations into Polymarket come as the platform seeks to further its drive for growth. Anonymous sources from the firm state that Polymarket could be looking into securing a $1 billion funding.
Last year, the platform secured $4 million funding in a round spearheaded by Polychain Capital. Other firms that participated in this funding round include Coinbase, CoinShares and AngelList.
Polymarket offers predictions for various events including speculating on the numbers of Covid 19, the prices of NFTs and other events when Donald Trump was president. The platform’s close competitor is Augur on Polygon.
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