Polymarket Receives Updated CFTC Approval for U.S. Trading

Polymarket, a prediction market platform, has secured an amended order from the U.S. Commodity Futures Trading Commission (CFTC), allowing it to operate as a regulated exchange in the U.S. This development enhances Polymarket's ability to connect with traditional trading structures, facilitating broader market participation and institutional involvement.

Key Takeaways

Polymarket has received an amended order from the CFTC for U.S. trading operations.
This approval enables the platform to offer intermediated access through futures commission merchants.
Enhanced trading capabilities are expected to improve user participation and market liquidity.
Polymarket commits to adopting robust operational safeguards and regulatory practices.
Galaxy Digital is exploring potential partnerships with Polymarket and Kalshi for liquidity provision.

Polymarket

New Era for Polymarket: Intermediated Trading Access

Polymarket has announced it has obtained an amended order of designation from the U.S. Commodity Futures Trading Commission (CFTC). This pivotal approval permits the platform to function as a fully regulated exchange in the United States.

With this updated designation, Polymarket is now authorized to implement intermediated access. This means that customers will be able to trade via futures commission merchants (FCMs) and brokerages can directly onboard users.

This regulatory change helps integrate Polymarket within the established U.S. market structure, thereby enhancing opportunities for broader participant engagement, institutional involvement, and increased market liquidity.

Polymarket's Integration with Traditional Market Infrastructure

The new CFTC designation allows Polymarket to interact with well-established market infrastructures prevalent in the derivatives and commodities sectors. Users can now engage in trading on U.S. platforms using conventional custody and compliance mechanisms.

Shayne Coplan, Founder and CEO of Polymarket, emphasized, “People rely on Polymarket because we provide clarity where there is confusion and accountability where there is ambiguity.” He added, “This approval reflects the maturity and transparency that the U.S. regulatory framework demands. We appreciate the productive engagement with the CFTC and are committed to demonstrating leadership as a regulated U.S. exchange.”

The introduction of intermediated trading is anticipated to bolster consumer protections, enhance market governance, and solidify Polymarket's status as a regulated venue for real-money event prediction in the United States.

Strengthening Safeguards: Enhanced Oversight and Market Reporting

Polymarket has committed to implementing a comprehensive framework of upgraded regulatory safeguards, including surveillance systems, market supervision protocols, clearing procedures, and necessary regulatory reporting capabilities. These critical elements align with the standards required of Designated Contract Markets (DCMs).

Before relaunching its services in the U.S., Polymarket will also establish additional rules and processes tailored for intermediated trading. These initiatives aim to boost compliance efforts, fortify internal controls, and maintain the integrity of all markets listed on the platform.

Collaboration with Galaxy Digital

In a significant move, Mike Novogratz’s Galaxy Digital is in discussions with prediction market platforms Polymarket and Kalshi to potentially become a liquidity provider. This interest comes as on-chain betting on real-world events gains traction from both retail traders and institutional investors.

Galaxy, known for offering crypto infrastructure and services to institutional clients, aims to act as a market maker on the platforms by regularly posting bids and offers to enhance trading liquidity. Novogratz recently shared with Bloomberg that Galaxy is "experimenting with market-making on prediction markets" and plans to extend broader liquidity support in the future.

This partnership could further position Polymarket on the forefront of the evolving market landscape within the cryptocurrency and blockchain sectors.