Polymarket appoints former CFTC chief Giancarlo as chair of advisory board
Former Commodity Futures Trading Commission (CFTC) head and crypto advocate Christopher Giancarlo has taken a seat as the chairman of crypto prediction platform Polymarket's advisory board.
The platform utilizes smart contracts to enable betting on event outcomes through the USDC stablecoin. Polymarket has said these are "decentralized information markets," which are used to reflect public sentiment through funds. Still, the platform enables users to purchase a contract based on a certain outcome at a price set by other people's sentiment and potentially receive a higher payout if the market resolves in their favor.
The CFTC determined those transactions constitute swaps, which requires licensure the platform had failed to obtain. Polymarket settled with the CFTC at the start of this year for "offering off-exchange event-based binary options contracts and failure to obtain designation as a designated contract market (DCM) or registration as a swap execution facility (SEF)." It paid a $1.4 million fine.
At that time, the CFTC noted Polymarket's "substantial" cooperation in the case, which reduced the penalty. Post settlement, it began geo-blocking US users to comply with its settlement measures. Still, at the time the new geoblocking measures were first put in place, a reporter from The Block was able to circumvent the geoblock using a VPN, though the reporter did not submit a transaction.
Polymarket CEO Shayne Coplan indicated that Giancarlo may help the firm navigate US derivatives regulation. In a Twitter thread announcing the appointment, Coplan said Giancarlo's skillset is "exactly what's needed to pioneer compliant DeFi in the US."
"The key will be abstracting the best parts of DeFi and adapting them to fit within the existing regulatory matrix," Coplan tweeted. "This will require novel solutions and collaboration, and Chris is the perfect person to help us get there."
Giancarlo noted the amends Polymarket has sought to make post-settlement in Bloomberg's coverage of his advisory board appointment, saying they followed the legal process, moved everything offshore, and did what was required.
