{"id":843,"date":"2022-01-04T07:23:52","date_gmt":"2022-01-04T07:23:52","guid":{"rendered":"http:\/\/cryptoheretostay.com\/?p=843"},"modified":"2022-01-04T07:23:53","modified_gmt":"2022-01-04T07:23:53","slug":"cftc-fines-decentralized-prediction-market-platform-polymarket-1-4-million-shuts-down-noncompliant-markets","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=843","title":{"rendered":"CFTC Fines &#8216;Decentralized&#8217; Prediction Market Platform Polymarket $1.4 Million, Shuts Down Noncompliant Markets"},"content":{"rendered":"<p> <script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<\/p>\n<p><strong>The U.S. Commodity Futures Trading Commission (CFTC) has ordered a \u201cdecentralized\u201d prediction market platform to shut down non-compliant markets and pay a fine of $1.4 million. \u201cPolymarket had been operating an illegal unregistered or non-designated facility for event-based binary options online trading contracts, known as \u2018event markets,&#8217;\u201d said the derivatives regulator.<\/strong><\/p>\n<h2>CFTC Takes First Crypto Enforcement Action of the Year<\/h2>\n<p>The Commodity Futures Trading Commission (CFTC) has taken the first crypto enforcement action of the year in the U.S. The derivatives regulator announced that it entered an order Monday \u201cfiling and simultaneously settling charges against Delaware-registered Blockratize, Inc. d\/b\/a Polymarket.\u201d<\/p>\n<p>The company was charged \u201cfor 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),\u201d the CFTC wrote. The regulator detailed:<\/p>\n<p>The order requires that Polymarket pay a $1.4 million civil monetary penalty, facilitate the resolution (i.e. wind down) of all markets displayed on Polymarket.com that do not comply with the Commodity Exchange Act (CEA) and applicable CFTC regulations.<\/p>\n<p>The New York city-based company must also \u201ccease and desist from violating the CEA and CFTC regulations, as charged.\u201d<\/p>\n<p>According to the order, \u201cBy January 14, 2022, [the] respondent shall cease offering access to trading in markets displayed on Polymarket.com\u201d unless they comply with the CFTC\u2019s rules.<\/p>\n<p>Polymarket describes itself as \u201ca decentralized information markets platform, harnessing the power of free markets to demystify the real-world events that matter most to you.\u201d It advertises that users can \u201cbet\u201d on their beliefs about the outcome of real-world events.<\/p>\n<p>The site lists a number of markets that users can bet on, such as \u201cWhat percent of US Covid-19 cases will be from the Omicron variant on January 1, 2022?\u201d and \u201cWill annual inflation in the European Union be 5.4% or more in December?\u201d<\/p>\n<p>However, its website notes: \u201cThe markets listed here are for informational purposes only. We take no profits from them.\u201d<\/p>\n<p>According to the derivatives watchdog, \u201cPolymarket had been operating an illegal unregistered or non-designated facility for event-based binary options online trading contracts, known as \u2018event markets&#8217;\u201d since approximately the beginning of June 2020.<\/p>\n<p>Noting that the platform \u201chas offered more than 900 separate event markets since its inception while deploying smart contracts hosted on a blockchain to operate the markets,\u201d the regulator described:<\/p>\n<p>Polymarket creates, defines, hosts, and resolves the trading and execution of contracts for the event-based binary option markets offered on its website.<\/p>\n<p>The CFTC explained that \u201cPolymarket\u2019s markets cover a large variety of binary options, including cryptocurrency [and] digital assets, current events, and financial conditions, among other events.\u201d<\/p>\n<p>The regulator emphasized that event market contracts offered on the Polymarket platform \u201cconstitute swaps under the CFTC\u2019s jurisdiction, and therefore can only be offered on a registered exchange in accordance with the CEA and CFTC regulations.\u201d The platform\u2019s civil monetary penalty has been reduced due to its \u201csubstantial cooperation with the Division of Enforcement\u2019s investigation of this matter,\u201d the CFTC noted.<\/p>\n<p>Following the CFTC\u2019s announcement, Polymarket issued a statement, explaining:<\/p>\n<p>We are pleased to confirm that we have successfully agreed to a settlement with the CFTC \u2026 the three markets set to resolve after January 14, 2022 that do not comply with the Act will be prematurely wound down and participants refunded.<\/p>\n<p><em><strong>What do you think about the CFTC\u2019s action against this prediction marketplace? Let us know in the comments section below.<\/strong><\/em><\/p>\n<p>Kevin Helms <\/p>\n<p class=\"article__body__author__info__about\">\nA student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.<\/p>\n<p><i class=\"td-icon-font td-icon-mail-1\"\/><\/p>\n<p class=\"images_credits\"><em>Image Credits: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n<p><strong>Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<p>More Popular NewsIn Case You Missed It<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/news.bitcoin.com\/cftc-fines-decentralized-prediction-market-platform-polymarket-1-4-million-shuts-down-noncompliant-markets\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. Commodity Futures Trading Commission (CFTC) has ordered a \u201cdecentralized\u201d prediction market platform to shut down non-compliant markets and pay a fine of $1.4 million. \u201cPolymarket had been operating an illegal unregistered or non-designated facility for event-based binary options online trading contracts, known as \u2018event markets,&#8217;\u201d said the derivatives regulator. CFTC Takes First Crypto [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":844,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[1],"tags":[],"class_list":["post-843","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-updates"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/843","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=843"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/843\/revisions"}],"predecessor-version":[{"id":845,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/843\/revisions\/845"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/844"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=843"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=843"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=843"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}