Polymarket is a well-known, decentralized platform that allows users to bet on the outcome of current events. Users stake tokens and earn for betti
Polymarket is a well-known, decentralized platform that allows users to bet on the outcome of current events. Users stake tokens and earn for betting correctly. Current events could include elections, global economic indicators, such as inflation forecasts, and even crypto price levels for a given day.
For a given outcome, users select one of two possible outcomes provided and then place their crypto stake.
The CFTC Fine and Cease and Desist Order
It didn’t take long for the CFTC to kickstart the year. On Monday, the CFTC reportedly ordered Blockratize Inc. to cease and desist “all markets displayed on Polymarket.com that do not comply with the Commodity Exchange Act (CEA)”.
According to the CFTC statement, the filing and simultaneous settling of charges was for offering off-exchange event-based binary options contracts and failure to obtain designation as a designated contact market (DCM) or registration as a swap execution facility (SEF).
Polymarket must pay a $1.4m monetary penalty and wind down all markets displayed on Polymarket.com that do not comply with the Commodity Exchange Act (CEA) and applicable CFTC regulations. Polymarket.com must also cease and desist from violating the regulations breached.
According to the CFTC, event market contracts, which are composed of a pair of binary options, constitute swaps under the CFTC’s jurisdiction.
Crypto Market Reaction
While the direct market reaction was relatively muted, the majors have struggled at the turn of the year. Increased regulatory chatter has tested support, with Bitcoin (BTC) falling back to sub-$46,000 levels before steadying.
At the time of writing, Bitcoin (BTC) was down by 0.54% to $46,200.
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