Polymarket Shatters Regulatory Barriers: CFTC Greenlights U.S. Return as Regulated Exchange

Prediction markets just got their Wall Street stamp of approval.

The Regulatory Revolution

Polymarket just pulled off the ultimate regulatory arbitrage play—securing CFTC blessing to operate legally on American soil. No more offshore shell games or regulatory gray areas. The compliance team deserves champagne.

Market Mechanics Unleashed

This isn't just another crypto exchange approval. We're talking about regulated event contracts trading alongside traditional finance instruments. Finally giving degenerates the institutional-grade playground they've been begging for.

The Compliance Gambit

Watching prediction markets go legit feels like seeing your favorite underground band sell out Madison Square Garden—part pride, part mourning for the wild west days. But let's be real: nothing screams 'mainstream adoption' like government paperwork.

Prediction markets just got their SEC-approved glow-up—because what's more American than betting on politics with proper regulatory oversight?

S&P Global Ratings downgraded Tether's USDT stablecoin to its weakest stability rating, citing rising exposure to volatile assets and warning that the stablecoin no longer has sufficient buffer to absorb a decline in Bitcoin's value.

The ratings agency lowered USDT's assessment to 5, or "weak," from 4, or "constrained," on Wednesday. Bitcoin now represents 5.6% of USDT in circulation, exceeding the roughly 3.9% reserve buffer implied by Tether's latest third-quarter attestation, S&P said.

The downgrade reflects concerns that high-risk assets now account for 24% of Tether's $181.2 billion in reserves backing $174.4 billion in circulating USDT, up from 17% a year ago. These assets include Bitcoin, gold, secured loans valued at over $14 billion, corporate bonds, and other investments subject to credit and market risks.

A material drawdown in bitcoin, especially if combined with losses in other high-risk holdings, could leave USDT undercollateralized, S&P warned. The agency also cited persistent gaps in disclosure about custodians, counterparties, and detailed asset composition.

to S&P regarding your Tether rating:

We wear your loathing with pride.

The classical rating models built for legacy financial institutions, historically led private and institutional investors to invest their wealth into companies that despite being attributed investment grade…

Tether CEO Paolo Ardoino rejected the assessment, writing on X that the company wears S&P's criticism "with pride." He argued that traditional rating models built for legacy financial institutions have historically failed, pointing to investment-grade companies that later collapsed.

"Tether instead built the first overcapitalized company in the financial industry, with no toxic reserves. And yet is and remains extremely profitable," Ardoino wrote, calling the traditional financial system "broken."

The company said in a statement that USDT has maintained stability through banking crises, exchange failures, and extreme market volatility over its decade-long history.

Despite the S&P downgrade, USDT remains the dominant stablecoin with a market cap exceeding $184 billion – more than double Circle's USDC at under $75 billion. The stablecoin has maintained its $1 peg throughout recent market volatility.

Tether's reserves include $135 billion in U.S. Treasury bills, with the company now among the largest global holders of U.S. government debt. Its overall collateralization ratio stands at 103.9%, with reserves exceeding liabilities by $6.8 billion.

Gold Holdings Rival Central Banks

Tether acquired 26 tonnes of Gold in Q3, more than any central bank during the same period, according to analysis by investment bank Jefferies, the Financial Times reported earlier this week. By the end of September, the company held approximately 116 tons of gold, valued at roughly $12.9 billion.

If it were a central bank, Tether's gold reserves WOULD rank among the top 30 globally, ahead of Greece, Qatar, and Australia. The holdings include about 12 tonnes backing its tokenized gold product XAUT, with the remaining 104 tons supporting USDT reserves. Gold now comprises roughly 7% of Tether's total reserves.

CEO Ardoino stated in September that Tether will continue investing profits into "safe assets like Bitcoin, Gold, and Land" as the world grows darker. The company has also invested $100 million in mining royalties firm Elemental Altus.

Bloomberg reported earlier this month that Tether recruited two senior metals traders from HSBC to bolster its precious metals operations. Vincent Domien, HSBC's global head of metals trading and a London Bullion Market Association board member, and Mathew O'Neill, who leads precious metals origination for Europe, the Middle East and Africa, are both completing notice periods before joining Tether.

Uruguay Mining Operation Shuttered

Separately, Uruguay media outlet El Observador reported Wednesday that Tether halted its bitcoin mining operations in the country, laying off 30 of 38 local staff after the national electricity provider cut power over nearly $5 million in unpaid bills.

Tether launched the mining project in May 2023 with plans to invest $500 million, including construction of three data centers in Florida and Tacuarembó provinces and a 300-megawatt wind and solar power facility. It ultimately spent only $100 million before the shutdown.

State electricity provider UTE halted power supply in late July after Tether's local subsidiary Microfin failed to settle outstanding debts. The company confirmed the termination to Uruguay's Ministry of Labor and Social Security following a meeting at the National Directorate of Labor.

Tether cited high energy costs and lack of predictable tariff frameworks as reasons for the exit, despite CEO Ardoino praising Uruguay's electrical grid as "robust and reliable" when operations launched.