-6.7 C
New York
January 22, 2022
Crypto News

CFTC Fines ‘Decentralized’ Prediction Market Platform Polymarket $1.4 Million, Shuts Down Noncompliant Markets – Regulation Bitcoin News

The U.S. Commodity Futures Trading Commission (CFTC) has ordered a “decentralized” prediction market platform to close down non-compliant markets and pay a wonderful of $1.4 million. “Polymarket had been operating an illegal unregistered or non-designated facility for event-based binary options online trading contracts, known as ‘event markets,’” stated the derivatives regulator.

CFTC Takes First Crypto Enforcement Action of the Year

The Commodity Futures Trading Commission (CFTC) has taken the primary crypto enforcement motion of the yr within the U.S. The derivatives regulator introduced that it entered an order Monday “filing and simultaneously settling charges against Delaware-registered Blockratize, Inc. d/b/a Polymarket.”

The firm was charged “for offering off-exchange event-based binary options contracts and failure to obtain designation as a designated contract market (DCM) or registration as a swap execution facility (SEF),” the CFTC wrote. The regulator detailed:

The order requires that Polymarket pay a $1.4 million civil financial penalty, facilitate the decision (i.e. wind down) of all markets displayed on Polymarket.com that don’t adjust to the Commodity Exchange Act (CEA) and relevant CFTC laws.

The New York city-based firm should additionally “cease and desist from violating the CEA and CFTC regulations, as charged.”

According to the order, “By January 14, 2022, [the] respondent shall cease offering access to trading in markets displayed on Polymarket.com” until they adjust to the CFTC’s guidelines.

Polymarket describes itself as “a decentralized information markets platform, harnessing the power of free markets to demystify the real-world events that matter most to you.” It advertises that customers can “bet” on their beliefs concerning the consequence of real-world occasions.

The web site lists various markets that customers can guess on, similar to “What percent of US Covid-19 cases will be from the Omicron variant on January 1, 2022?” and “Will annual inflation in the European Union be 5.4% or more in December?”

However, its web site notes: “The markets listed here are for informational purposes only. We take no profits from them.”

According to the derivatives watchdog, “Polymarket had been operating an illegal unregistered or non-designated facility for event-based binary options online trading contracts, known as ‘event markets’” since roughly the start of June 2020.

Noting that the platform “has offered more than 900 separate event markets since its inception while deploying smart contracts hosted on a blockchain to operate the markets,” the regulator described:

Polymarket creates, defines, hosts, and resolves the buying and selling and execution of contracts for the event-based binary possibility markets supplied on its web site.

The CFTC defined that “Polymarket’s markets cover a large variety of binary options, including cryptocurrency [and] digital assets, current events, and financial conditions, among other events.”

The regulator emphasised that occasion market contracts supplied on the Polymarket platform “constitute swaps under the CFTC’s jurisdiction, and therefore can only be offered on a registered exchange in accordance with the CEA and CFTC regulations.” The platform’s civil financial penalty has been lowered on account of its “substantial cooperation with the Division of Enforcement’s investigation of this matter,” the CFTC famous.

Following the CFTC’s announcement, Polymarket issued a press release, explaining:

We are happy to substantiate that we have now efficiently agreed to a settlement with the CFTC … the three markets set to resolve after January 14, 2022 that don’t adjust to the Act might be prematurely wound down and members refunded.

What do you concentrate on the CFTC’s motion in opposition to this prediction market? Let us know within the feedback part under.

Kevin Helms

A scholar of Austrian Economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His pursuits lie in Bitcoin safety, open-source methods, community results and the intersection between economics and cryptography.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational functions solely. It just isn’t a direct supply or solicitation of a proposal to purchase or promote, or a advice or endorsement of any merchandise, providers, or firms. Bitcoin.com doesn’t present funding, tax, authorized, or accounting recommendation. Neither the corporate nor the creator is accountable, instantly or not directly, for any injury or loss brought on or alleged to be brought on by or in reference to the usage of or reliance on any content material, items or providers talked about on this article.

Related posts

5 Crypto Exchanges Custody 1.6 Million Bitcoin or Close to 8% of the Capped Supply – Exchanges Bitcoin News

Crypto Advisor

First Cryptocurrency ATM Reportedly Installed in Uruguay – Emerging Markets Bitcoin News

Crypto Advisor

Arbitrum Network Stalled Due to Sequencer Downtime – Bitcoin News

Crypto Advisor

Leave a Comment