Polymarket is being investigated by the Commodity Futures Trading Commission (CFTC) as to whether the prediction market platform is letting customers improperly trade swaps or binary options and if it should be registered with the agency, Bloomberg reported, citing people familiar with the matter.
The company, which facilitated about 4 billion shares since the start of operations last year, has been in talks regarding a new round of funding that could value the platform at nearly $1 billion, Bloomberg said, citing two people family with the matter.
New York-based Polymarket has hired the former head of the CFTC’s enforcement division to handle the probe, Bloomberg said, again citing sources.
Bloomberg said the CFTC declined to comment while Polymarket gave an answer that neither confirmed nor denied the existence of any probe.
Decentralized finance (DeFi) entrepreneurs have long argued that smart contract interfaces shouldn’t be policed like centralized exchanges.
Polymarket founder Shayne Coplan declined to comment when reached via Telegram.
Zack Seward contributed reporting.