Polymarket founder says CFTC no-action letter is the green light the platform needs to go live in the US

Blockchain-based predictions market Polymarket now has the green light to operate in the US. The platform CEO, Shayne Coplan, disclosed this on X after the Commodities Futures Trading Commission (CFTC) issued its No-Action Letter on Event Contracts.

In a statement by the CFTC, the regulator stated that the letter, which emanated from the CFTC Division of Market Oversight and Division of  Clearing and Risk, recommended that the commission should not take any action against the event contract platform for compliance with certain regulations.

The letter reads:

“The Commodity Futures Trading Commission’s Division of Market Oversight and the Division of Clearing and Risk today announced they have taken a no-action position regarding swap data reporting and recordkeeping regulations for event contracts.”

This was in response to a request from Polymarket US for clarity on the subject. This effectively means that CFTC will not take any enforcement action against Polymarket and those using it because of its failure to comply with certain regulations.

The statement further said:

“The Commodity Futures Trading Commission’s Division of Market Oversight and the Division of Clearing and Risk today announced they have taken a no-action position regarding swap data reporting and recordkeeping regulations for event contracts.”

In his tweet, Coplan described this as all the signals that Polymarket needs to go live in the US, stating that the platform now has the “green light” and thanking the CFTC and its staff for doing impressive work. He hinted that there would be further announcements with the statement, “Stay tuned.”

What does the CFTC No-Action letter say?

In the 6-page no-action letter signed by the Acting Director for Market Oversight, Rahul Varma, and the Acting Director for Clearing and Risk, Richard Haynes, the CFTC noted that the divisions recommended the no-action position in line with precedents, as these were recommendations for similar cases in the past.

It added that the decision was also based on Polymarket’s undertaking to meet certain conditions. These include ensuring all events contracts are fully collateralized positions,  clearing all contracts through QC Clearing LLC and never through a third-party clearing member, providing CFTC with transactional information, among other conditions.

However, the commission added that the letter only reflects the position of its staff on whether to enforce certain regulations and does not amount to a legal conclusion on whether Polymarkets contracts are legal or not.

Based on this caveat, the regulator stated that the no-action letter is not binding on the commission nor will it excuse anyone from complying with other applicable laws or regulations. It added that the position was also reached based on information provided, and any change in circumstances or omission of material facts could render it void.

Despite the letter leaving CFTC with significant discretion on whether the position will apply and even when it would apply, it appears to be more than enough to offer clarity for Polymarket and enable it to return to the US.

Crypto community reacts to Polymarket’s return

Meanwhile, the potential return of Polymarket to the US has attracted positive reactions from the crypto community. For many, it is a further sign of the regulatory clarity the industry has enjoyed since President Donald Trump was sworn in.

Polymarket has been banned from operating in the US since 2022, with the CFTC fining it $1.4 million for regulatory violations. However, it shot to the limelight during the 2024 presidential elections with over $3 billion in trading volume while operating outside the US, an impact which it sealed by correctly predicting President Donald Trump as the winner.

Many have congratulated  Coplan on the milestone, with high expectations that the platform could soon allow Americans to gamble on other events, including sports. Crypto podcaster Scott Melker described it as massive news, while Bloomberg analyst James Seyffart believes logic and pragmatism won the day.

Still, it is unclear when  Polymarket will actually return to the US. The platform already kick-started the plan by acquiring the derivatives market platform QCX in July for $112 million. It was QCX that requested the no-action letter from the CFTC.

The US Department of Justice had also dropped its probe into the platform back in July, laying the groundwork for a return in the US. Interestingly,  1789 Capital, a fund owned by Donald Trump Jr, invested in Polymarket in August, with Trump Jr joining the company’s advisory board.

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