Blockchain Betting Platform Polymarket Fined $1.4M By CFTC; To Scrap Markets Not In Compliance

Blockchain-based betting platform Polymarket has agreed to pay $1.4 million to settle charges brought on by the Commodity Futures Trading Commission (CFTC) for offering off-exchange options contracts without registering as a “swap execution facility".

A CFTC order said Polymarket allowed the public to “bet on your beliefs” by buying and selling binary options contracts related to a future event with a “yes” or “no”, such as: “Will $ETH (Ethereum) be above $2,500 on July 22?”

“All derivatives markets must operate within the bounds of the law regardless of the technology used, and particularly including those in the so-called decentralized finance or ‘Defi’ space," , said Vincent McGonagle, CTFC’s acting director of enforcement.

The CFTC said it had entered an order filing and simultaneously settling charges against Polymarket, as the platform was found to have operated an “illegal unregistered or non-designated facility” since 2020.

Polymarket has offered more than 900 separate event markets since its inception, while deploying smart contracts hosted on a blockchain to operate the markets.

Polymarket is required to pay a civil monetary penalty of $1.4 million along with winding back any markets on the platform that do not comply with CFTC and Commodity Exchange Act (CEA) regulations.

The CFTC, however, noted that Polymarket received a reduced civil monetary penalty due to its “substantial cooperation” with the investigation into the platform.