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Taiwan Officials to Investigate Crypto Betting Involving Election Results

Residents from Taiwan are found to use an illegal betting platform called Polymarket. This digital platform reported record-breaking traffic during the 2020 United States election. As per local reports, a recent surge in user activity was noticed on the platform owing to the upcoming presidential elections in Taiwan.

The results of the elections will be finalized on 13th January 2024. However, authorities have warned citizens from visiting the site or placing new bets in the form of cryptocurrencies. The locals have been putting wagers regarding the outcome of the ongoing presidential election.

To halt the betting program, authorities have called various suspicious parties for questioning as part of the investigation process. A number of Taiwanese citizens are participating in the DeFi protocol to generate extra income by trying to predict the next presidential nomination.

However, a team of prosecutors and investigators are rooting out suspected participants involved with the hacking incident. Under Taiwanese laws, engaging in election-related betting is illegal.

Commodity and Futures Trading Commission Launches Lawsuit Against Illegal Betting Sites

CFTC brought charges against Polymarkets, an illegal DeFi betting platform in January, 2022. The regulators have claimed that the trading platform did not apply for registration with regulators and has continued to operate as a non-designated forum since June 2020.

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The betting platform generated $10 million in revenues citing record participation. CFTC has continued to crack down against DeFi platforms. The regulatory agency brought lawsuit against 3 DeFi platforms during the last quarter namely Opyn, ZeroEx, and Deridex.

On this account, Opyn and ZeroEx paid a penalty of $250K and $200K. Meanwhile, Deridex settled with a civil penalty of $100K. Regulators are also planning to issue a ‘cease & desist’ order for the affected DeFi protocols.

CFTC officials have claimed that Deridex and Opyn did not apply for swap execution facility (SEF), designated contract market (DCM), and futures commission merchant (FCM). Regulators also accused the firm of not adding account registration checks in accordance with Bank Secrecy Act compliance.

Additionally, regulators purported that the DeFi protocol offered leveraged commodity transactions in the form of digital assets to retail investors.

Blockchain Sector to Seek Regulatory Clarity

DeFi protocols have introduced a new form of fintech service to investors. In the absence of clear regulatory guidelines, the blockchain sector has continued to operate as self-regulated firms.

However, regulators have continued to claim that the industry has sufficient regulatory clarity in the form of existing laws. SEC Chief Gary Gensler recently quoted 1946 Supreme Court case to claim that investment contract-based transactions are subjected to securities laws.  

At the same time, the CFTC is bringing lawsuits against various DeFi protocols for violating commodity trading regulations by offering unlicensed digital assets services. SEC has also brought lawsuits against various crypto trading platforms such as Binance, Kraken, and Coinbase for offering unregistered securities in the form of digital currencies.

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Importance of Regulatory Clarity

On the other hand, various digital asset operators have talked about the importance of regulatory clarity for the industry. Coinbase CEO was critical of the regulatory action of CFTC against DeFi protocols.

He noted that enforcement action against DeFi protocols is not a violation of the Commodity Exchange Act and asked the court to establish a legally viable precedent. He recently commented that the blockchain sector asked the SEC to give feedback and only got a lawsuit.

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Hassan Mehmood (Saudi Arabia)

Hassan is currently working as a news reporter for Tokenhell. He is a professional content writer with 2 years of experience. He has a degree in journalism.

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