The Commodity Futures Trading Commission (CFTC) issued an amended order of designation to Polymarket, a prediction markets leader. This will allow Polymarket to operate a federally regulated intermediated trading platform in the U.S.
Key Takeaways
- Polymarket left the U.S. market in 2022, following a settlement with the CFTC.
- In July, Polymarket acquired the CFTC-licensed QCX LLC and QC Clearing LLC.
- Polymarket’s Amended Order of Designation paves the way for its partner PrizePicks to offer sporting event and election contracts.
Polymarket is one of the world’s largest prediction markets. Yet it hasn’t officially operated in the U.S. since 2022, when it ran afoul of the CFTC. This year, however, the company has successfully clawed its way back into the federal regulator’s good graces.
The CFTC’s issuance of an amended order of designation, announced Tuesday, will allow Polymarket to directly onboard brokerages and customers and enable users to trade through future commission merchants (FCMs).
Earlier this month, PrizePicks and Polymarket inked a multi-year partnership in anticipation of Polymarket’s U.S. return. PrizePicks is one of the only sports entertainment operators registered as an FCM by the National Futures Association.
“People rely on Polymarket because we provide clarity where there is confusion and accountability where these is ambiguity,” Polymarket CEO and founder Shayne Coplan said in Tuesday’s press release. “This approval allows us to operate in a way that reflects the maturity and transparency that the U.S. regulatory framework demands. We’re grateful for the constructive engagement with the CFTC and look forward to continuing to demonstrate leadership as a regulated U.S. exchange.”
Polymarket’s U.S. return has been facilitated, in no small part, by the current administration, which looks to loosen cryptocurrency and prediction market regulations.
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Polymarket’s comeback trail
In July, the CFTC and U.S. Department of Justice dropped their ongoing investigations of Polymarket. Days later, Polymarket acquired the CFTC-licensed QCX LLC and QC Clearing LLC (QCEX) for $112 million, basically buying a regulated path back to the U.S.
In August, Donald Trump Jr. joined Polymarket’s advisory board, soon after his venture capital fund 1789 Capital made a sizeable investment in the company.
Last month, QCEX filed "self-certification" documents with the CFTC indicating its intent to offer sports-related moneyline and point spread contracts, as well as election winner contracts.
While Polymarket’s U.S. relaunch is still pending, a couple of sports leagues are betting on the come. Last month, the NHL signed partnership agreements with both Polymarket and its competitor Kalshi. Earlier this month, the UFC designated Polymarket as its official and exclusive prediction market.
