CFTC Fines Polymarket for Unregistered Swaps

• The Commodity Futures Trading Commission (CFTC) has issued the cryptocurrency betting service Polymarket a $1.4 million dollar fine on charges that the service failed to register with the U.S. regulator.

• Polymarket is a cryptocurrency betting service that allows users to pick one of two options on a given trade, such as who may win a football game or an election, and place bets on the outcome.

• The charges state that Blockratize, Inc. d/b/a Polymarket “offered off-exchange event-based binary options contracts and failed to obtain designation as a designated contract market (DCM) or registration as a swap execution facility (SEF).”

• Acting Director of Enforcement Vincent McGonagle stated that “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. Market participants should proactively engage with the CFTC to ensure that our markets remain robust, transparent, and afford customers the protection provided under the CEA and our regulations.”