Research on the New York Polymarket Decentralized Outlook was conducted by the US Commodity Futures Trading Commission (CFTC).
The CFTC is investigating whether Polymarket allows its clients to trade binary options and swap agreements, which must be registered with the Norwegian Financial Supervisory Authority, according to an Oct. 23 Bloomberg report citing anonymous sources. The CFTC has not yet confirmed whether it is investigating Polymarket.
A spokesperson for the platform stated that “Polimarket is firmly committed to complying with applicable laws and regulations and providing information to regulators to assist them with any request.”
The report claims that the company has hired a former CFTC executive and current partner at law firms Sullivan and Cromwell, James MacDonald, to investigate.
Polymarket has a number of news prediction markets that allow users to make assumptions about the outcome of future events using a fixed US dollar symbol. Polymarket does not take any website with its clients and hosts a smart contract interface that allows users to interact with the protocol.
The report claims that the investigation is underway as Polimarket is in talks to secure a new round of funding, with anonymous sources claiming the increase could value the company at around $1 billion.
In October 2020, Polymarket received a $4 million funding round led by Polychain Capital, which also included CoinShares CSO Meltem Demirors, former Coinbase CTO Balaji Srinivasan and AngelList CEO Naval Ravikant.
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Polymarket is not the only one offering decentralized prediction markets, and Augur launched its own Polygon platform in early October.
While Polymarket offers an eclectic array of markets, including speculative hit count, CryptoPunks minimum prices, and Donald Trump’s presidential chance, Augur Markets is currently focusing on sporting events and cryptocurrency forecasts.