Polymarket submitted an application for a futures commission merchant license on July 3 through Coming Home GBA LLC, according to Bloomberg. The license would enable the prediction market operator to offer margin trading to U.S. customers and handle customer orders and funds for derivatives trading, functioning more like a traditional futures broker. The move represents Polymarket's continued effort to build a regulated U.S. business after receiving an amended order of designation from the CFTC in November, which allowed it to operate an intermediated trading platform under federal exchange requirements. The company previously paid a $1.4 million penalty to the CFTC in 2022 for operating an unregistered event contracts platform.
Polymarket Applies for Futures Commission Merchant License
Polymarket submitted the FCM license application on July 3 through Coming Home GBA LLC, according to Bloomberg. An FCM is a firm that solicits or accepts orders for futures, options on futures or swaps, and accepts money or other assets from customers to support those orders, according to the National Futures Association. Registered FCMs must also become NFA members. The license would allow Polymarket to operate more like a traditional futures broker, handling customer orders and funds for derivatives trading.
CFTC Oversight and Regulatory Compliance History
Polymarket received an amended order of designation from the CFTC in November, allowing it to operate an intermediated trading platform under the requirements applied to federally regulated U.S. exchanges. That approval allowed Polymarket to onboard brokerages and customers directly and use traditional market infrastructure for custody, reporting, and access. The company said at the time that it had developed enhanced surveillance, market supervision, clearing, and regulatory reporting systems before launch.
In 2022, the CFTC ordered the company to pay a $1.4 million penalty and wind down markets that did not comply with federal derivatives rules, after finding that Polymarket had operated an unregistered event contracts platform. AP reported this week that Polymarket has been trying to distinguish its U.S. exchange from its international platform, with the U.S. business operating under CFTC oversight and using traditional dollars rather than crypto.
Margin Trading and Risk Management Requirements
Margin trading would introduce leverage into event contracts, a structure that could appeal to more sophisticated traders but would also increase the importance of risk controls, surveillance, and customer protection. The company has since moved to rebuild its U.S. presence through a regulated structure.
FAQ
What did Polymarket apply for on July 3?
Polymarket submitted an application for a futures commission merchant license on July 3 through Coming Home GBA LLC, according to Bloomberg. The license would allow the company to offer margin trading to U.S. customers and handle customer orders and funds for derivatives trading.
Why did Polymarket pay a penalty to the CFTC in 2022?
In 2022, the CFTC ordered Polymarket to pay a $1.4 million penalty and wind down markets that did not comply with federal derivatives rules, after finding that the company had operated an unregistered event contracts platform.
What regulatory approval did Polymarket receive in November?
Polymarket received an amended order of designation from the CFTC in November, allowing it to operate an intermediated trading platform under the requirements applied to federally regulated U.S. exchanges. That approval allowed the company to onboard brokerages and customers directly and use traditional market infrastructure for custody, reporting, and access.
