The OSC is cracking down on crypto-betting platform Polymarket – The Logic The OSC is cracking down on crypto-betting platform Polymarket – The Logic

The Ontario Securities Commission (OSC) is strengthening oversight of Polymarket, a crypto-based betting platform in which users can wager on the outcome of real-world events. Polymarket is distinct in that it runs fully on cryptocurrency, allowing trades and winnings to be paid out automatically.   

The Ontario securities regulator contended that Polymarket’s wagers are binary options, whereby investors bet by choosing a “yes” or “no” or multiple-choice question. Canada’s ombudsman for banking services and investments considers binary options to be a high-risk investment strategy, and they were banned in 2017.

The OSC alleged in a recent filing that the majority of event-based contracts offered to Ontario investors on Polymarket between June 2020 and May 2023 were binary options. While the OSC and the two companies behind Polymarket have reached a settlement, an upcoming hearing will determine whether the agreement they reached is in the public interest.

Osler’s Matthew Burgoyne, Chair of the Digital Assets and Blockchain practice, tells The Logic that the use of crypto technology doesn’t “insulate the project from the application of securities laws.”

If you have a subscription, you can read the full article by Claire Brownell, “The OSC is cracking down on crypto-betting platform Polymarket,” on The Logic website.