Polymarket unit wins NFA approval to operate as a futures broker

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Polymarket’s PM Derivatives LLC has received approval from the National Futures Association (NFA) to operate as a futures commission merchant (FCM), a type of broker, according to Yahoo Finance. Polymarket still needs approval from the U.S. Commodity Futures Trading Commission (CFTC) to run an FCM broker.

What the NFA approval covers

Polymarket currently runs a CFTC-registered exchange and an offshore platform. PM Derivatives plans to operate on a fully collateralized basis, meaning all positions are funded in full at the time of trades.

Nikhil Joshi described the approval as a "foundational step" in a statement from PM Derivatives LLC. The approval may pave the way for Polymarket to expand its operations.

Scrutiny around prediction markets

The CFTC is currently investigating Polymarket, and prediction markets have faced scrutiny and legal headwinds. Polymarket traders are betting on events such as Tuesday’s midterm election results.

The issue has drawn legal attention in New York and elsewhere. PlayNY reported on Aug. 1 that New York sued Kalshi, saying the prediction market is an illegal gambling operation. PlayNY also reported on Aug. 4 that a South Carolina lawsuit targets DraftKings Predictions and Polymarket over alleged illegal gambling.

The prediction markets industry has surged over the past two years, aided by supportive policies under President Donald Trump’s second administration.

More from playny.com – CFTC tells Kalshi, Polymarket to drop sportsbook-style odds as New York pressure builds – Polymarket Removes Cornell Case Market After Backlash – CFTC moves to separate prediction contracts from sportsbook wagers

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Source: As reported by Yahoo Finance.