Polymarket faces criticism for declaring ‘approved’ result on $13M Ethereum ETF wager

Users of Polymarket are expressing dissatisfaction with the decentralized betting platform after losing money on bets against the approval of spot Ether (ETH) exchange-traded funds (ETFs). The betting market on the blockchain platform saw over $13.2 million in bets placed on whether an Ether ETF would be approved by May 31, but the definition of “approved” was not clearly specified. The market closed with a “Yes” result on May 23 after the Securities and Exchange Commission (SEC) approved the 19b-4 filings for multiple Ether ETFs. Although the result was briefly disputed, it was ultimately resolved as a “Yes.” However, those who voted “No” argue that the call is incorrect, as a United States ETF requires an approved 19b-4 filing and Form S-1 to begin trading on an exchange. Without the S-1 filing, they believe a “Yes” result is not possible. Analysts predict that it could take months before the SEC approves the S-1 filings, which some “No” voters had relied on. One of the prominent “No” bidders, known as “JustKen,” changed their name to “RevengeTour19B4” in response to the situation. They cited a post by Matthew Sigel, the head of digital assets research at VanEck, who stated that ETFs are not considered “approved” until both the S-1 and 19b-4 filings have been signed off by the SEC. The winning “Yes” camp argued that the market specified “approval” and did not require the ETFs to start trading by May 31. Some claim that the SEC’s 19b-4 approvals are considered final approval, as Form S-1 approvals typically follow. Risk Labs, the company behind UMA, a blockchain oracle platform that handles information disputes on Polymarket, and Adventure One QSS Inc., the development firm of Polymarket, did not respond to requests for comment on the situation.