The Commodity Futures Trading Commission (CFTC) is reportedly investigating Polymarket, a decentralized market forecasting platform, according to sources at Bloomberg.
The news agency said the derivatives regulator is “investigating whether Polymarket is allowing clients to improperly trade swaps or binary options and whether this should be registered with the agency.”
“Polymarket is firmly committed to cooperating with applicable laws and regulations and to providing information to regulators that will assist them in any investigation,” a Polymarket representative told Bloomberg.
Polymarket “has not been accused of any infringement,” according to the report. The news agency also said the company had hired James McDonald, a former CFTC chief of inspection and current partner at Sullivan & Cromwell, as part of its response to the investigation.
Polymarket allows users to place speculative bets on certain outcomes using stablecoin US Dollar Coin (USDC) as a means of transaction. Users can bet on results by purchasing contracts that are compensated on the network Ethereum.
The platform raised $4 million in a new round of investments last year, which took place just before the US presidential election.
According to Bloomberg sources, Polymarket is expected to carry out a new round of fundraising, which will possibly lead to a $1 billion valuation.
That would rank the company among a growing number of unicorn startups, which correspond to companies that have reached the $1 billion mark in valuation.
The news agency also noted that Polymarket, since its launch in June last year, has seen more than 4 billion shares traded.
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