Polymarket, a self-described “decentralized information markets platform”, is facing a probe from the Commodity Futures Trading Commission (CFTC) for possibly falling foul of U.S. trading regulations, per Bloomberg.

“Polymarket is firmly committed to complying with applicable laws and regulations and to providing information to regulators that will assist them with any inquiry,” a Polymarket spokesperson said. The CFTC reportedly declined to comment. 

Decrypt has also reached out to the CFTC and we will update this article should we receive a response. 

What does Polymarket do? 

At the time of writing, the Polymarket website offers a plethora of wagers—or “markets”—giving users the chance to bet on simple yes or no outcomes. 

Examples include whether or not the floor price of CryptoPunks will be above 100 ETH by November 1, 2021, and whether or not the FDA will approve any COVID-19 vaccination for children under 12 by the same date. 

Polymarket is also offering a bet on whether or not the U.S. infrastructure bill will become law by November 4, 2021; the bill has been a big source of anxiety for crypto enthusiasts in recent months. 

The CFTC probe

James McDonald, a partner at law firm Sullivan & Cromwell, has reportedly been retained by Polymarket to handle the CFTC’s investigation. 

McDonald should be familiar with the CFTC, given that he was head of the regulator’s enforcement division until last year.  

While Polymarket has come under CFTC investigation, it is important to point out the company has not been accused of any wrongdoing at this time. 

This is not the first time the CFTC has been embroiled in a crypto-related investigation. 

In March of this year, the CFTC launched an investigation against crypto exchange Binance for allegedly allowing American traders to place wagers that go against U.S. laws. 

Earlier this month, the CFTC also leveled a $41 million fine against Tether for allegedly making “untrue or misleading statements and omissions of material fact in connection with the U.S. dollar tether token (USDT) stablecoin.” 

Bitfinex, Tether’s sister company, was also hit with a $1.5 million fine for “illegal, off-exchange retail commodity transactions in digital assets.”