The investigation’s findings come as the business is thought to be in discussions to raise money at a valuation of roughly $1 billion.
According to Bloomberg, the Commodity Futures Trading Commission (CFTC) is investigating Polymarket to see if the prediction market platform is allowing consumers to inappropriately trade swaps or binary options, and if it should be registered with the agency.
Bloomberg reported that the business has been in negotiations about a fresh round of investment that could value the platform at roughly $1 billion, citing two individuals familiar with the situation. The company has enabled around 4 billion shares since it began operations last year.
According to Bloomberg, the CFTC declined to comment, while Polymarket responded with a statement that neither acknowledged nor denied the existence of any investigation.
Entrepreneurs in the field of decentralized finance (DeFi) have long advocated that smart contract interfaces should not be regulated in the same way that centralized exchanges are.
When contacted through Telegram, Polymarket CEO Shayne Coplan declined to respond.