#What does Polymarket's new approval mean for prediction markets?
Polymarket, recognized as the largest prediction market globally, has secured an amended order from the US Commodity Futures Trading Commission. This approval permits the platform to function as a regulated exchange under US laws, significantly enhancing its operational capacities. By allowing intermediated trading through futures commission merchants, Polymarket is moving closer to integrating prediction markets into the realm of traditional finance.
This crucial approval facilitates Polymarket in onboarding brokerages and users directly, which enables US-based trading while utilizing established systems for custody and reporting. The foundation of this approval is rooted in Polymarket’s earlier acquisition of QCX LLC and QC Clearing, which are both CFTC-licensed entities to operate as a clearinghouse and exchange. The $112 million acquisition solidified Polymarket's foundation for compliant operations in the US.
#How is Polymarket ensuring compliance with regulations?
With this approval, Polymarket is set to re-enter the US market, fully aligned with federal exchange regulations. It has implemented significant upgrades to its technology, incorporating advanced surveillance measures and enhancing its clearing systems to comply with the rigorous standards expected from Designated Contract Markets. The integration of part-16 reporting capabilities is a hallmark of this commitment, demonstrating Polymarket's readiness to engage responsibly with the evolving landscape of prediction markets.
Moreover, Polymarket remains under the stringent supervision of the CFTC and is obligated to adhere to all provisions of the Commodity Exchange Act. Ahead of its launch, additional processes will be introduced to meet the requirements for intermediated trading. This strategic expansion positions Polymarket as a compliant venue for the trading of contracts linked to real-world events, paving the way for a new era in prediction markets that resonates well with institutional standards of trading.