Binary options new york.
A New York City-based company settled CFTC charges for offering off-exchange, event-based binary options contracts and for failing to obtain designation as a designated contract market ("DCM") or registration as a swap execution facility.
The CFTC alleged that, beginning in June 2020, the company, through its website, operated an illegal, unregistered or non-designated facility for event-based binary options online trading markets ("event markets"). According to the CFTC, event market contracts, each composed of a pair of binary options, constitute swaps and, therefore, fall under the CFTC's jurisdiction and can only be offered on a registered exchange in accordance with the CEA and CFTC regulations. As a result, the CFTC charged the company with violations of Commodity Exchange Act Sections 4c(b) ("Prohibited transactions") and 5h(a)(1) ("Swap Execution Facility Registration"), and CFTC Rules 37.3 ("Requirements and procedures for registration") and 32.2 ("Commodity option transactions").
To settle the charges, the company was required to (i) pay a $1.4 million civil monetary penalty, (ii) wind down markets displayed online that do not comply with the CEA and applicable CFTC regulations, and (iii) cease and desist from violating the CEA and CFTC regulations as charged.
Primary Sources.
CFTC Order: Blockratize, Inc. d/b/a Polymarket.com.
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