Polymarket, a cryptocurrency exchange in the United Kingdom accused of fraudulently trading with users funds. Polymarket will be fined $1.4 million and shut its services while they are investigated further by regulators
Polymarket is a cryptocurrency exchange that has been fined $1.4 million by the SEC for not registering as a broker-dealer. The company will shut down services and pay the fine in order to avoid further legal action.
The Commodity Futures Trading Commission (CFTC) has fined Polymarket, a prominent crypto prediction market service provider, $1.4 million and ordered it to shut markets that are not in conformity with the federal agency’s standards.
Polymarket will be fined $1.4 million.
Blockratize, the parent company of Polymarket, was accused of failing to register as a designated contract market (DCM) and a swap execution facility (SEF) and thus being ineligible to offer off-exchange event-based binary options contracts, according to a press release issued by the leading financial regulator.
Polymarket has been functioning as an illegal events market, according to the news release, and urged the public to “bet on your belief.” The CEA and CFTC rules are being broken by this activity.
Polymarket is a decentralized information markets platform that enables users to wager on the result of real-world events including national inflation rates, political elections, COVID-19 reported cases, and political nominations.
On the site, the CFTC included samples of some of these events, such as “Will $ETH (Ethereum) be over $2,500 on July 22?” and “Will $ETH (Ethereum) be above $2,500 on July 22?” ; “Will the COVID-19 case count in the United States on the day of July 22 be fewer than 15,000?” ; “Will Trump win the 2020 presidential election?”
“All derivatives markets, regardless of the technology employed, and especially those in the so-called decentralized finance or ‘DeFi’ arena, must function within the confines of the law,” stated Vincent McGonagle, the CFTC’s Acting Director of Enforcement.
The CFTC acknowledged that the business’s assistance throughout the inquiry contributed to the lower penalty the New York-based firm was ordered to pay.
We’re glad to announce that we’ve reached an agreement with the CFTC, and we’re looking forward to moving ahead and focusing on the future of Polymarket.
According to the ruling, the three markets that have been open since January 14 and do not conform with the Act will be addressed prematurely. Soon, there will be more.
3 January 2022 — Polymarket (@PolymarketHQ)
In a tweet, Polymarket announced the fine while also noting that:
“The three markets that will persist beyond January 14 and do not conform with the Act will be resolved prematurely.”
Some of the most well-known Polymarket betting events
The crypto betting site made a prediction on the Cardano blockchain, the project underlying the ADA cryptocurrency, in July 2021, asking people whether the project will be able to activate its smart contract functionality before October 1, 2021.
Polymarket was beaten by Charles Hoskinson for $50,000 because Cardano released the Alonzo update, which included smart contract capability, earlier than planned.
Cardano was re-challenged by Polymarket, who this time pondered whether the value of its native currency will reach $3. Surprisingly, the aforementioned token unexpectedly spiked to the target, and the Polymarket was defeated for the second time.
It also launched a wager on who would win the 2020 presidential election in the United States, between former President Donald Trump and Joe Biden, in which the latter ultimately emerged as the next president.
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