Decentralised betting platform Polymarket is under fire from users who lost money betting against the approval of spot Ether exchange-traded funds (ETFs). These users argue that the bet is still on.
A specific betting market on Polymarket saw over $13.2 million in bets on whether an Ether ETF would be approved by May 31. However, the term “approved” was not clearly defined in the bet’s details.
The market closed with a “Yes” outcome on May 23, following the SEC’s greenlighting of the 19b-4 filings for multiple Ether ETFs. Despite brief disputes, Polymarket logs show that the result was confirmed as “Yes.”
“No” voters dispute this outcome, arguing that a U.S. ETF requires both an approved 19b-4 filing and a Form S-1 to begin trading on an exchange. They contend that without the S-1 filing, the “Yes” result is invalid.
Analysts indicate it could take months for the SEC to approve the S-1 filings, which some “No” voters had anticipated.
A prominent “No” bettor, “JustKen” — who later renamed themselves “RevengeTour19B4” — cited a post by VanEck’s Matthew Sigel stating that ETFs aren’t “approved” until both the S-1 and 19b-4 filings are signed off by the SEC.
Basic stuff:
ETFs are not considered ‘approved’ until both the relevant registration form (such as S-1, N-1A, or N-2) & the 19b-4 filing have been signed off on by the SEC. https://t.co/bNglCRkVPN— matthew sigel, recovering CFA (@matthew_sigel) May 23, 2024
Dissatisfied bettors also referenced comments by Bitwise investment chief Matt Hougan on the Unchained podcast, where he described ETFs as requiring both the 19b-4 and S-1 approvals.
On the other hand, some in the “Yes” camp argue that the market only specified “approval” and not that the ETFs needed to start trading by May 31. They claim the SEC’s 19b-4 approvals are considered final, with Form S-1 approvals typically following suit.
Risk Labs, the company behind the blockchain oracle platform UMA, which handles information disputes on Polymarket, did not respond to requests for comment. Similarly, Polymarket’s development firm, Adventure One QSS Inc., also did not immediately respond to requests for comment.