Polymarket has received crucial regulatory approval from the Commodity Futures Trading Commission (CFTC), paving the way for its relaunch in the U.S. market. Following the closure of prior investigations, the prediction market platform is now set to compete with established players like Kalshi.
CFTC Grants Key Approval
On Wednesday, the CFTC issued a no-action letter that allows Polymarket to sidestep certain data reporting and record-keeping requirements. Such exemptions are common for prediction markets where contracts are tied to various event outcomes, from economic indicators to election results.
Without this letter, the compliance costs associated with transaction reporting would have been significant, potentially hindering Polymarket’s profitability in the U.S. market. “We’re ready to get started in the U.S.,” said Shayne Coplan, CEO of Polymarket, on social media after the announcement.
The exchange has made gradual progress toward its return to the U.S. market, having acquired QCX earlier this year. QCX had already secured CFTC approval for its exchange application in July, setting the stage for Polymarket’s expansion within a regulated framework.
Background on Investigations
Polymarket’s aspirations for the American market faced delays due to regulatory scrutiny that began in 2022. That year, the platform encountered a consent order from the CFTC, limiting its ability to serve U.S. users.
Questions arose over whether Polymarket continued to allow U.S.-based traders to use its platform despite these restrictions, prompting investigations by the CFTC and the Department of Justice (DOJ). Both agencies have since closed their inquiries, removing significant barriers to Polymarket’s operations.
The most recent regulatory clearance, combined with the earlier acquisition of QCX, marks a turning point for Polymarket as it seeks to reestablish itself in the U.S. market.
Competitive Landscape
With its return to the U.S. market, Polymarket joins an increasing number of CFTC-regulated exchanges vying for market share in the prediction market space. Among its competitors is Kalshi, which is already operating legally in the U.S., along with larger cryptocurrency platforms like Crypto.com that have shown interest in event-based contracts.
The prediction market model has garnered increased attention in recent years, as investors, traders, and the public seek innovative ways to speculate on real-world outcomes. With clear regulatory guidance now established, Polymarket can attract both institutional and retail interest, provided it adapts its offerings while remaining compliant with U.S. oversight.
This latest approval represents more than just a regulatory milestone for Polymarket; it presents an opportunity to compete directly with established players and reassert itself as a leader in the event contract sector, now under the comprehensive oversight of U.S. regulators.
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