The US Commodity Futures Trading Commission is investigating Polymarket, a decentralised prediction market located in New York (CFTC).
The CFTC is examining whether Polymarket is enabling its users to trade binary options and swaps that should be registered with the financial authority, according to a Bloomberg storey citing unnamed sources on Oct. 23. The CFTC has yet to say if it is looking into Polymarket.
“Polymarket is firmly committed to complying with applicable laws and regulations and to providing information to regulators that will assist them with any inquiry,” a spokesman for the platform said.
According to the article, the corporation has hired James McDonald, a former director of the CFTC’s enforcement division and current partner at law firm Sullivan & Cromwell, to handle the investigation.
Polymarket offers a number of unique prediction marketplaces in which users may wager on the outcome of future events using the USD Coin stable token. Polymarket does not take sides with its clients and provides a smart contract interface via which users may engage with the protocol.
According to the storey, the inquiry is underway while Polymarket negotiates a fresh round of investment, with unidentified insiders suggesting the company might be valued at close to $1 billion.
Polymarket raised $4 million in fundraising in October 2020, headed by Polychain Capital and including CoinShares CSO Meltem Demirors, former Coinbase CTO Balaji Srinivasan, and AngelList CEO Naval Ravikant.
Polymarket isn’t the only company offering decentralised prediction markets; Augur debuted a Polygon version of its platform at the beginning of October.
Unlike Polymarket, which provides a diverse spectrum of markets such as covid case numbers, CryptoPunks floor pricing, and Donald Trump’s presidential possibilities, Augur markets are currently focused on sporting events and crypto price forecasts.