Romanian regulator blacklists Polymarket over licensing issues

Leading prediction platform Polymarket has been blacklisted by Romania’s National Office for Gambling (ONJN). According to the Romanian regulator, the prediction website has been operating in the country, carrying out gambling activities without an active license from the required agency.

“The decision to include Polymarket on the blacklist is not related to technology, but to the law,” ONJN President Vlad-Cristian Soare said in a statement. “Regardless of whether you bet in lei or crypto, if you bet money on a future result, under the conditions of a counterpart bet, we are talking about gambling that must be licensed.” Soare added that the regulator will not allow platforms to use the transformation of blockchain into a screen to carry out illegal betting activities.

Launched in 2020, Polymarket is a polygon-based prediction market with its headquarters in Manhattan, New York. It allows individuals to place bets on future events, including economic indicators, awards, and political and legislative outcomes. The platform allows users to deposit USDC through the Polygon blockchain network. The platform became more popular after it accurately predicted Donald Trump as the winner of the United States presidential elections. It accrued over $3.3 billion in wagers on the election.

Romanian regulator blacklists Polymarket

According to the Romanian regulator, while it understands that Polymarket is often regarded as an “event trading platform” and meets the definition of what it considers a “counterparty betting,” users still put up stakes against other users, and a future event determines the outcome.

“Accepting the idea that a ‘counterparty betting’ system can be called ‘trading’ would create a dangerous precedent, whereby any operator could ‘reinterpret’ the counterparty betting activity as a stock exchange activity – circumventing strict gambling or capital markets regulations,” the regulator wrote.

The Romanian regulator was particularly concerned about the increased prediction market activity during the Romanian local elections. For example, the regulator claimed that the market on Polymarket, where it asked users to predict the mayor of the capital city of Bucharest, has seen more than $16 million in volume. Earlier this year, an electoral market on the platform also generated more than $370 million in total volume.

International scrutiny and POLY token launch

Polymarket has garnered scrutiny across the world for similar reasons. Last year, France’s National Gaming Authority announced plans to ban the platform after an investigation into its compliance with French gambling legislation. “The regulator is currently examining [Polymarket’s] operation as well as its compliance with French gambling legislation,” a report from French news outlet The Big Whale said at the time.

The platform had also been effectively banned in the United States following a fine from the Commodities and Futures Trading Commission (CFTC) back in 2022. However, in July, it acquired derivatives exchange QCX, which has received a no-action letter from the regulator, essentially allowing the prediction platform to resume its activities in the United States. Polymarket recently received a $2 billion investment from the New York Stock Exchange owner, Intercontinental Exchange.

Meanwhile, Polymarket is planning to launch its POLY token and an airdrop. As previously reported by Cryptopolitan, Polymarket CMO Matthew Modabber confirmed plans in an interview. “There will be a token, there will be an airdrop […] We could have launched a token whenever we wanted, and it’s just how thorough we want to be about it. We want it to be a token with true utility, longevity, and to be around forever, right? That’s what we expect from ourselves, and that’s what I think everyone in the space expects from us,” he said.

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Source: https://www.cryptopolitan.com/romanian-regulator-blacklists-polymarket/