CFTC Grants Amended Order of Designation to Polymarket
Polymarket has received an Amended Order of Designation from the U.S. Commodity Futures Trading Commission (CFTC), a significant development that permits the prediction market platform to operate as a fully regulated U.S. exchange. This approval was granted on Monday and officially announced on Tuesday.
The designation enables Polymarket to offer intermediated access within the United States. This means users will have the ability to participate through established channels such as futures commission merchants and traditional brokerage firms. The company had previously indicated last month its expectation to resume operations in the U.S. in November, following a period where access was restricted for U.S. citizens starting in 2022.
Implications of Regulatory Oversight
This approval places Polymarket under the comprehensive regulatory framework governing federally supervised exchanges. This includes adherence to enhanced surveillance measures, stringent market supervision standards, established clearing procedures, and the fulfillment of Part 16 reporting obligations. Shayne Coplan, Founder and CEO of Polymarket, commented that this decision signifies a growing acceptance of prediction markets as a legitimate and mature financial product within the regulatory landscape.
Coplan further emphasized that individuals turn to Polymarket for its ability to provide clarity in ambiguous situations. He stated that the approval allows the company to operate in a manner that aligns with the maturity and transparency demanded by the U.S. regulatory framework.
Background of Regulatory Scrutiny
The regulatory approval follows approximately five months after the CFTC and the U.S. Department of Justice concluded an investigation into Polymarket. The probe focused on whether the platform had been accepting trades from users located within the United States. Reports indicated that the FBI had conducted a raid on Coplan's residence as part of this investigation, during which his electronic devices were seized.
As a consequence of operating within the United States, the prediction platform is now subject to the oversight and regulation of the CFTC. Furthermore, a market structure bill currently progressing through Congress has the potential to broaden the CFTC's authority over digital assets.
The CFTC notice, issued under the purview of acting chair Caroline Pham, comes at a time when the U.S. Senate is anticipated to hold a vote soon on the nomination of SEC official Michael Selig to serve as the next chair of the commodities regulator. Lawmakers on the Senate Agriculture Committee have already advanced Selig's nomination along party lines.
Even in the event of Selig's confirmation, the CFTC would still have four vacant commissioner seats. As of Tuesday, U.S. President Donald Trump had not yet announced any potential candidates to fill these leadership positions within the regulator.
Future Operations and Market Impact
The company is now set to proceed with onboarding brokerages and customers directly, while simultaneously facilitating trading on U.S. venues under the newly established regulatory framework. Polymarket's return to the U.S. market represents a significant development for prediction markets in the country. These markets have encountered considerable regulatory scrutiny over the years, despite their increasing popularity among traders and political analysts who rely on them for real-time sentiment data concerning elections and other significant events.