The operators of crypto-based prediction market, Polymarket, agreed to a two-year ban and monetary sanctions to settle allegations from the Ontario Securities Commission (OSC) that it violated securities law by offering risky binary options trading.
Ontario’s Capital Markets Tribunal approved a proposed settlement with the firms that have operated Polymarket — Blockratize Inc. and Adventure One QSS Inc. — which admitted that its market that offered event-based bets breached the prohibition on offering certain binary options to retail investors.
According to the settlement, between June 2020 and May 2023, Polymarket offered binary options in Ontario, and solicited trading in those options through social media and other online channels that breached the rules, without an exemption.
Approximately 28,500 people based in Ontario visited the market up until May 2023, when the company restricted access at the request of the OSC.
The company cooperated with the regulator’s investigation and voluntarily adopted restrictions on Ontario users, the settlement noted.
As part of the settlement, the companies agreed to disgorge the estimated US$22,966.75 in revenues that they earned from Ontario residents trading binary options during the period.
They also agreed to a two-year trading and registration ban, to pay a $200,000 penalty and to pay $25,000 in costs. Those payments have already been made, the settlement said.