The US Commodity Futures Trading Commission (CFTC) said it will not pursue enforcement against two entities tied to prediction platform Polymarket.
In a Wednesday notice, the CFTC said it had issued a no-action letter “regarding swap data reporting and recordkeeping regulations for event contracts” with QCX LLC and QC Clearing LLC.
“The divisions will not recommend the CFTC initiate an enforcement action against either entity or their participants for failure to comply with certain swap-related recordkeeping requirements and for failure to report to swap data repositories data associated with binary option transactions and variable payout contract transactions […],” said the regulator.
The action essentially allows Polymarket to offer event contracts without reporting the data required under US financial regulations, providing temporary relief from enforcement while not exempting the companies from regulatory compliance.
In a Wednesday X post, Polymarket CEO Shayne Coplan said the CFTC’s action had given the company “the green light to go live in the USA.”
“This process has been accomplished in record timing,” said Coplan. “Stay tuned.”
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Polymarket reported acquiring QCEX in July for $112 million, which included the CFTC-licensed derivatives exchange and clearinghouse, giving it a greater foothold in US markets.
According to the request for no-action relief in July, QCX said the event contracts at issue are still “required to be fully collateralized” and “no market participant will clear QCEX Contracts through a third-party clearing member.”
Regulators change their tune
The no-action letter seemed to be another example of US financial regulators softening their approach to crypto enforcement following the changeover to the Trump administration in January.
In the last eight months, the Securities and Exchange Commission has dropped several investigations and lawsuits into digital asset companies, many of which were filed under former chair Gary Gensler.
Donald Trump Jr., the US president’s son, joined Polymarket’s advisory board in August. Brian Quintenz, Trump’s pick to chair the CFTC, awaits consideration in the Senate, with acting chair Caroline Pham the sole commissioner remaining at the regulator as of Wednesday.
Polymarket was also a target of regulatory enforcement. In 2022, the CFTC ordered the company to pay $1.4 million for having operated an “illegal unregistered or non-designated facility.”
Authorities had also reportedly been investigating Polymarket over trades from US-based users after the 2024 US elections, but closed their probes in July.
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