Polymarket Considers Launching Token, Eyes $50M Funding Amid Rising Election Bets

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated:

September 24, 2024 00:59 EDT

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Blockchain-based prediction market Polymarket is negotiating raising over $50m in new funding, The Information reported on Monday. The company is also reportedly considering launching a token to support its betting platform.

Investors in the upcoming funding round are expected to receive warrants, giving them the option to buy tokens if Polymarket moves forward with its token issuance. The platform plans to use these tokens for users to verify real-world event outcomes, the report said.

If Polymarket moves forward with a token launch, it would mark one of the most significant token introductions since the crypto market’s recovery in 2022. This could allow Polymarket to generate revenue through token sales, transaction fees, or other activities, transitioning from its current no-fee model to one where the token plays a key role in user interaction.

The platform didn’t return Cryptonews’ request for comment by press time.

Polymarket Gains Momentum as Election Betting Hub During 2024 US Presidential Race

Polymarket’s popularity has surged, particularly as a hub for election betting during the 2024 US presidential race. Users are placing bets not only on the presidential outcome but also on various related political events, highlighting strong interest in political prediction markets.

The platform doesn’t charge transaction fees but thrives on user activity. High trading volumes, especially during major events like US elections, showcases its engaged user base. Polymarket is drawing in new users, with estimates suggesting an addition of 75,000 accounts in August.

CFTC Warns of Potential Action Over Derivatives Trading

Launching a token could expose Polymarket to stricter regulatory scrutiny, especially if it’s classified as a security, which would require compliance with securities laws affecting its marketing and distribution.

This month, the CFTC warned Polymarket and other offshore platforms about potential enforcement if they continue offering derivatives contracts to U.S. customers without registration. The CFTC likely views parts of Polymarket’s activities as derivatives trading, requiring regulatory adherence.

In May, Polymarket revealed it raised $70m across two funding rounds. This included a $25m round led by General Capital and a $45m Series B led by Peter Thiel’s Founders Fund.