Polymarket Shuts Down Markets, Faces $1.4 million Fine From CFTC
WASHINGTON – Prediction market platform Polymarket is ceasing operations of its markets and will pay a $1.4 million fine after being sanctioned by the Commodity Futures Trading Commission (CFTC) for failing to register as a designated contract market or a swap execution facility, the agency announced today. the CFTC concurrently ordered full refunds to users.
The action comes despite recent approvals signaling Polymarket’s planned re-entry into the U.S. market under a regulated structure. In September, the CFTC issued a no-action letter concerning event contracts following a request from Polymarket entities QCX LLC, a designated contract market, and QC Clearing LLC, a derivatives clearing organization. This letter allowed event contracts without triggering standard swap data reporting and recordkeeping mandates.
Further bolstering Polymarket’s position, Intercontinental Exchange (ICE), parent company of the New york Stock Exchange (NYSE), announced a $2 billion strategic investment in Polymarket in October, valuing the company at roughly $8 billion pre-investment. The deal positioned ICE as a global distributor of Polymarket’s event-driven data and initiated collaboration on tokenization initiatives.
In November, Polymarket announced CFTC approval allowing it to operate in the U.S.under a fully regulated exchange structure. “This approval allows us to operate in a way that reflects the maturity and transparency that the U.S. regulatory framework demands,” said Polymarket Founder and CEO Shayne Coplan in a press release at the time. “We’re grateful for the constructive engagement with the CFTC and look forward to continuing to demonstrate leadership as a regulated U.S. exchange.”
