The U.S. Commodity Futures Trading Commission (CFTC) has granted a “no-action letter” to Polymarket. This move effectively clears the way for the crypto prediction market platform to relaunch in the United States.
This decision comes after Polymarket’s acquisition of a CFTC-licensed derivatives exchange and clearinghouse, providing a legal framework for its U.S. operations.
The CFTC stated that it will not pursue enforcement against two Polymarket-acquired entities, QCX LLC and QC Clearing LLC, for non-compliance with certain data reporting and recordkeeping requirements for event contracts.
Polymarket CEO Shayne Coplan announced that the CFTC’s action provides “the green light to go live in the USA,” noting that the process was completed in “record timing.”
Polymarket acquired QCEX for $112 million, specifically to gain the necessary CFTC licenses and re-enter the U.S. market. The company had previously been forced to exit the U.S. in 2022 after the CFTC fined it $1.4 million for operating as an unregistered facility.
The decision follows the announcement that Donald Trump Jr. joined Polymarket’s advisory board and that his venture capital fund, 1789 Capital, has invested in the company.
Additionally, Brian Quintenz, Trump’s nominee for CFTC chair, is a former commissioner who has been seen as supportive of prediction markets.
DeFi Lending Surges on Institutional Demand
According to a new report from Binance Research, decentralized finance (DeFi) lending protocols have seen explosive growth, with their total value locked (TVL) surging over 72% year-to-date, from $53 billion to over $127 billion.
The report highlights that the increased acceptance of tokenized RWAs as collateral for stablecoin loans is poised to draw in more institutional participants.
Binance Research noted that as tokenized assets become more integrated into the mainstream financial system, new financial products will emerge, creating more efficient and transparent capital markets.
This significant increase is attributed to accelerated institutional adoption of stablecoins and tokenized real-world assets (RWAs).Tokenized financial products, particularly private credit and U.S. Treasury bonds, are a major focus for institutions.
According to data from RWA.xyz, tokenized private credit makes up the majority of on-chain RWAs at $15.9 billion, followed by U.S. Treasurys at $7.4 billion.
While some RWA protocols allow yield-bearing U.S. Treasury products to be used as collateral for various DeFi activities, a June report from Moody’s cautioned that this practice could create new risk transmission pathways, such as cascading effects for DeFi protocols.
As institutional interest and the adoption of tokenized assets continue to grow, DeFi lending protocols are positioned to play a key role in the future of finance by connecting traditional assets with decentralized infrastructure.
Risks for Yield-Chasing Crypto Firms
The growing trend of companies holding Ether (ETH) in their corporate treasuries has been praised as a major step for institutional crypto adoption.
However, not everyone sees this as a risk-free move.
Joseph Chalom, co-CEO of Sharplink Gaming, a major Ether holder, warns that the pursuit of high yields in these treasuries could expose companies to significant dangers.
While staking Ether and using decentralized finance (DeFi) protocols can offer double-digit returns, Chalom points out the various dangers that loom. Credit risk, counterparty risk, technical risks to list a few.
The consequences of risky strategies extend beyond individual companies. Chalom warns that if a firm collapses due to reckless capital raising or aggressive yield-hunting, it could damage trust in ETH-based treasuries across the board.
“The sector could be tainted by people that do imprudent things,” he said.
Sharplink is the second-largest public holder, while BitMine Immersion Technologies leads with over $8 billion in Ether reserves. This concentration of holdings among a few firms magnifies the potential for systemic risk
Chalom himself agrees that ETH treasury strategies are highly scalable and flexible, which is part of their appeal. However, he emphasizes that the volatility of crypto markets means that these models remain vulnerable to sharp price swings.
