CFTC to start using its first DeFi in 2022: Polymarket raug was fined $ 1.4 million for bidding.

On Monday, the Federal Bureau of Investigation (CFTC) passed its first regulation of the year for financially corrupt companies (DeFi). OTC (CEA) standards were continued for the establishment of commercial (DCM) and point-to-point exchange (SEF) contracts for registration. Fine Polymarket of 1.4 million US dollars and wants all illegal businesses closed. for

Obviously, the CFTC divides the resulting assets on the Polymarket platform based on the exchange (a type of business in which both parties agree to exchange specific assets for a specific future).

According to the survey, Polymarket has operated over 900 independent businesses since its inception and has been distributed and managed through smart blockchain contracts. Polymarket has generated nearly 5 billion transactions since its launch in June 2020 and is still one of the most valuable crypto unicorns worth over $ 1 billion. for

Polymarket has partnered with regulators and, in CFTC news outlet, the company "worked closely with authorities to investigate the matter in the form of reduced public penalties." “We are very happy to have reached this agreement with the CFTC and are very excited to move forward and focus on the future of Polymarket,” Polymarket tweeted. “The non-compliance activity will be based on what I have learned from previous supported experiences, and I will build a team based on performance and practices. Quality and procedures to ensure compliance are a key element in Polymarket's global business development. "

The cryptocurrency market is not a first step in the process.

In general, forex bets are derivatives of the market made from facts that can be identified in the future. Unlike platforms which have similarities, betting markets are based on actual data collected by participants, and the price is determined by the activities of each betting participant doing business. Participants make decisions and bet on the occurrence of future events and may benefit from them if their estimates comply with generally accepted rules.

It is important to note that the value of the "commodity" in the industry estimates the outcome that participants believe. These events range from presidential gains to tomorrow morning's weather.

Since the advent of information exchange, people have become more and more passionate about online gambling so that all users can participate in online gambling quickly and easily. The forex market trusts a lot of middlemen, who want them to match the fairness and integrity of the game, so middlemen get paid. Things like maintenance costs, segmented activities, and black box operation will protect consumers from revenue.

As crypto assets continue to be embedded in key contexts, core blockchain technology provides solutions and fosters the advancement of a decentralized world. The benefits of blockchain technology have made the betting market open and reliable. For example, who will be elected in the next US election and which team will win football? These issues arise at some point in the future, and the end result is real, true, and uncertain.

The Crypto Prediction Marketplace is a DeFi distribution protocol that allows a person to trade with a smart contract without an intermediary, under certain circumstances. As the DeFi user experience improves, the advantage of market forecasts is that they can be affected by global warming events and can provide users with more competitive currency and better capacity.

Polymarket is a trading platform developed by Polygon, the second Ethereum solution. Users receive financial assistance from the United States for global hot topics, such as the US presidential election, epidemics, and crypto assets. place bets on USDC Stable results are the result of the market. It should be noted that Ethereum co-founder V God praised Polymarket.

“Try Polymarket now. It features a user interface designed by Polygon's Ethereum side chain and designed to appeal to users outside the circle. It is also possible to purchase USDC using a debit card. "

Let's do an incomplete estimate as an example. "How will the EU's annual inflation rate increase by 5.4% in December? 'This event gives the user two investments, yes or no, the value of both is the result that the market will be aware of the situation, and the numbers for both are adjusted by $ 1. If the user thinks the market value is different from the actual event, they can buy the option and profit from it.

Compared to other commercial industries, Polymarket has two main advantages.

First, the project is polygon-based, and changes in user behavior do not require analysis of the Ethereum network key, so avoid interference such as overhead and overhead time.

Secondly, users can buy USDC to trade in this project using debit or credit card without the need for encrypted assets and keep their private keys etc. thus reducing users' initial access.

At the same time, Polymarket adopts Automated Market Maker (AMM) process, and all consumer products are deducted from 2% of the market share.

However, the Polymarket development team did not disclose details of the project. At the same time, there is currently nothing for users to create predictive events on their own. All estimates are made by working groups and appear to be self-determined based on public data. Only commercial disputes were concerned by the Ministry of Justice. MIC).

In practice, forex trading is a platform on which traders can predict the outcome of real-world events, with the idea of ​​a top-notch blockchain-heavy application. Compared to DeFi protocol, it has failed to create a remarkable volume of exchanges in recent years.

Can cryptocurrency prediction markets break the rules?

In 2021, the CFTC hopes to become the primary crypto regulator. CFTC actor Rosin Behnam once said during the hearing that the CFTC intends to become the "cop" of crypto assets, given that the total size of the cryptocurrency market is 2.7 trillion dollars. With% being a commodity, it is especially important to maintain the strength of the CFTC.

The CFTC has been legal in the crypto industry for a few years. In October 2021, Tether, the largest capital asset provider, USDT, was fined $ 41 million for investment misinformation. Currently, the CFTC monitors the crypto derivatives market and may take action against fraud in the crypto industry.

Following the announcement of Polymarket's sanctions, CEO Vincent McGonagall said: Manufacturers should actively engage with the CFTC to ensure the market remains stable and transparent and provide consumers with protection against the CEA and our policies . "

In June 2021, CFTC Director Dan Berkovitz stated that unlicensed DeFi activity could be illegal in the United States. Derivatives in the DeFi industry, such as futures, may be illegal under industry law, and federal law "is no exception to the commercial industry. Trade finance." at the same time, in his view, the DeFi derivatives market will be the domain of the CFTC.

In addition, excessive regulation, legal restrictions and regulatory costs of the platform must also limit the growth of the traditional gambling industry, and the blockchain-based crypto betting market is often seen as a way around. the law.

The CFTC granted a special exemption to PredictIt, a forensic research company in 2014, in part because it was a non-profit study conducted by the University of Victoria, Wellington, New Zealand , and set up an investment of US $ 850. However, while PredictIt has been approved by the United States Federal Government, many state laws still restrict these platforms. Alabama, Colorado, Hawaii, Illinois, Louisiana, and other states are most likely to break the law. On the other hand, InTrade, a large gambling company, was shut down after being sued by the CFTC for illegal trading.

Photo: 2020 Political Events of the Following Business Platform PredictIt

Blockchain-based trading can avoid distribution oversight rather than intermediary platform predictions. In blockchain-based market forecasting, users are free to plan their activities on demand, and the blockchain platform provides management and financial support for positive behaviors.

It is currently uncertain whether other crypto gaming industries such as Augur and Omen will suffer the same fate as Polymarket.

It should be noted that the current cryptocurrency trading platform is not fully decentralized. Blockchain research firm The Block, in its annual report for 2021, believes the bidding process requires the use of appropriate business and anti-corruption measures. Trading platforms do not have the importance of total distribution.

While some critical trading platforms, such as PredictIt, are still in business, it will always be seen that crypto forecast trading platforms can become a blockchain killer app or move forward in the DeFi ecosystem.