Polymarket has secured an Amended Order of Designation from the US Commodity Futures Trading Commission (CFTC), granting the formerly offshore platform legal status to operate as a regulated US exchange.
The approval, announced Tuesday, marks the end of the company’s "wild west" era. To enter the US market, Polymarket has agreed to an "intermediated" structure, meaning domestic customers must trade through registered brokers and Futures Commission Merchants (FCMs) rather than accessing the protocol directly via crypto wallets.
The Institutional Pivot
The deal effectively transforms prediction markets from a retail niche into a federally regulated asset class. Crucially, the new model mandates the use of FCMs, regulated brokerages that act as custodians and compliance gatekeepers.
Such a structure forces a departure from the platform's non-custodial roots, but the trade-off is calculated. By accepting oversight, Polymarket removes the specific compliance hurdles that previously kept Wall Street capital on the sidelines.
For trading firms like Galaxy Digital, the regulatory green light serves as immediate validation. As Sandmark reported yesterday, Galaxy has been exploring market-making partnerships in the sector; the new intermediated model creates a direct requirement for such institutional liquidity providers to service the FCM network.
Buying Legitimacy
The approval follows a calculated strategy by founder Shayne Coplan to "provide clarity where there is confusion". It also appears to leverage the infrastructure of QCEX, a CFTC-licensed exchange that Polymarket acquired for $112mn in July to fast-track its compliance capabilities.
While the move opens the door to billions in US capital, it also fundamentally alters the product. The "permissionless" nature of the platform is now replaced by a "permissioned" wall for US users, mirroring the structure of traditional derivatives exchanges such as CME.
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