According to Cointelegraph, the U.S. Commodity Futures Trading Commission (CFTC) announced that it will not seek enforcement actions against two entities associated with the prediction platform Polymarket. In a notice issued on Wednesday, the CFTC provided a no-action letter concerning exchange data reporting regulations and registration requirements for event contracts involving QCX LLC and QC Clearing LLC.
The Commodity Futures Trading Commission (CFTC) decision means that the divisions will not recommend starting enforcement actions against these entities or their participants due to non-compliance with data reporting requirements related to exchanges. Additionally, they will not be required to report data related to binary options transactions and variable payout contract transactions to exchange data repositories. This step effectively allows Polymarket to offer event contracts without being bound by the data reporting requirements set forth by U.S. financial regulations, providing temporary relief from enforcement while still requiring regulatory compliance.
Polymarket's acquisition of QCEX in July for $112 million included a CFTC-licensed derivatives exchange and clearinghouse, expanding its presence in the U.S. markets. Requests for relief from enforcement actions in July indicated that the relevant event contracts must remain fully collateralized, and no market participant would settle QCEX contracts through an external clearing member. This development is considered part of an ongoing story, with more updates expected as further information becomes available.
