CFTC conducts investigation into the world’s leading decentralized staking platform Polymarket.
The Commodity Futures Trading Commission (CFTC) is reportedly investigating Polymarket, a prominent decentralized staking marketplace in the market.
The source said that the regulator is investigating whether Polymarket is allowing clients to trade swaps or binary options, better known as Trade BO, and the issue of registration. legally signed with the CFTC. Faced with this situation, the official representative of Polymarket said:
“Polymarket is firmly committed to complying with applicable laws and regulations and providing information to regulators to assist them in any investigation.”
The point to note about the CFTC is that this agency has the same “weight” and is considered a close brother to the SEC. The CFTC plays a key role in overseeing products and services relevant to the futures market. The Chicago Mercantile Exchange (CME), the world’s leading Bitcoin futures exchange is also closely watched by the CFTC, as SEC chairman Gary Gensler explained in a recent Bitcoin ETF explanatory statement.
According to the report, Polymarket has not been accused of any wrongdoing. As well as fortification, the company hired former CFTC enforcement director James McDonald, now a partner at Sullivan & Cromwell, as part of its response to the investigation.
Polymarket allows users to bet on investments on certain outcomes, using stablecoin USDC as the medium of exchange. Users can participate in the Polymarket by purchasing contracts on the Ethereum network. The company raised $4 million in new funding around November of last year, around the same time as the US presidential election.
Polymarket is in talks to raise a new round of funding with a possible valuation of close to $1 billion. That would put the company in the ranks of crypto-focused startup “unicorns,” with a host of representatives at similar valuations as of early 2021. At the same time, Polymarket has made a mark. It has seen trading of around 4 billion shares since its launch in June 2020.
US authorities at both the federal and state levels have been increasing their oversight of the cryptocurrency sector in recent years. While the White House and the Treasury Department want to tighten regulation of the stablecoin sector, the Securities and Exchange Commission (SEC) is constantly opening investigations into DeFi projects such as Uniswap, stablecoin USDC and the latest is Terra (LUNA), while the New York state government requires lending platforms to cease operations.
