Users of the decentralized platform Polymarket have raised their voices in protest after losing money on predictions regarding the approval of Ethereum Exchange Traded Funds (ETFs). Despite the platform closing the prediction market with a “Yes” outcome on May 23, user dissatisfaction persists over the approval process for the funds, which was not thoroughly clarified.
What Sparked the User Revolt?
The market concluded positively after the U.S. Securities and Exchange Commission (SEC) gave preliminary approval to multiple Ethereum ETF applications through 19b-4 forms. While some users quickly objected to this outcome, the final decision remained unchanged. However, “No” voters argue that a 19b-4 form alone is insufficient, as an S-1 form must also be approved before ETFs can commence trading.
Is the Approval Process Clear?
Prominent user JustKen, who changed his name to RevengeTour19B4, highlighted comments from VanEck’s Matthew Sigel, who asserted that both ETF and S-1 approvals are necessary for a valid result. The SEC’s prolonged approval of S-1 forms could mean that the “Yes” outcome was prematurely declared. This opinion was bolstered by Bitwise’s Matt Hougan, who described the dual approval process as a “nuclear key scenario” during a podcast interview.
User Insights and Action Points
Key Takeaways for Users:
- Understand the necessity of both 19b-4 and S-1 form approvals for ETF trading.
- Investigate the SEC’s timeline and requirements for ETF approvals to inform future predictions.
- Consider engaging in forums like those provided by UMA for clarification on prediction markets.
Outcome and Future Considerations
Some winning predictors argue that the market only required SEC acknowledgment by May 31, not the initiation of trading. They claim that 19b-4 approvals generally precede S-1 approvals. Despite the ongoing debate, neither Risk Labs, the company behind UMA, nor Adventure One QSS Inc., responsible for Polymarket development, have commented on the situation.
