New York-based decentralized prediction market Polymarket is under investigations from the United States Commodity Futures Trading Commission.
The CFTC is investigating whether Polymarket is permitting its customers to trade binary options and swaps that should be registered with the financial regulator. The CFTC is still to confirm whether it is investigating Polymarket.
Claims suggest that the company has engaged the former director of the CFTC’s enforcement division and current partner at legal firm Sullivan & Cromwell, James McDonald, to address the probe.
Polymarket hosts a range of novelty predictive markets that enables users to speculate on the outcome of future events using the USD Coin stable token. Polymarket does not take positions against its customers and hosts the smart contract interface allowing users to interact with the protocol.
The report states the investigation comes as Polymarket is in talks to secure a new round of funding, with anonymous sources claiming the raise could see the firm valued at close to $1 billion.
Polymarket is not alone in offering decentralized prediction markets, with Augur launching a Polygon deployment of its platform at the start of October.
