Regulatory Roundup: From Elections to Sports—The Dynamics of Decentralized Prediction Markets

Nevertheless, no system is airtight. Earlier this year, a contract was created titled “Ukraine agrees to Trump mineral deal before April?” As of late April, only a memorandum of intent was being put in place, with no deal agreed upon before March 31. Despite disputes within the UMA Oracle, the contract resolution was marked “Yes,” resulting in a full payout for incorrect predictions and leaving accurate predictors empty-handed.

It’s unclear how this happened, but there are a few possibilities. One is that a “whale,” someone who controls many UMA tokens, cast a significant number of votes to influence the outcome for profit. Alternatively, the challenge may have been ignored by the UMA community due to limited oversight on the voting group’s composition. Polymarket has not provided many details on the incident, apart from stating that they plan to develop new monitoring systems.

Lessons Learned: Ensuring Integrity in Prediction Markets

It’s unlikely that this incident will dampen the growing popularity of prediction markets, but there are important lessons to be learned. Firstly, active monitoring is essential. It enables organizations to quickly detect and diagnose incidents, allowing for decisive and transparent responses. Secondly, this incident highlights the crucial nature of the contract resolution process and its potential as a risk area for fraud or market failure.

April 2025 Capital Markets Regulatory Updates

17 April: The Canadian Securities Administrators (CSA) published amendments to National Instrument 81-102 to provide regulatory clarity for Public Crypto Asset Funds, including criteria for crypto assets, investment restrictions, and custody requirements.

14 April: The South Korean Financial Intelligence Unit (FIU) requested Apple to restrict access to 14 crypto apps, which aims to curb unregistered foreign virtual asset services. 

14 April: The South Korean Financial Services Commission (FSC) announced that the government approved the revision bill for the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) intended to establish new sanctions mechanisms against unfair trading and illegal short sale activities. The revised Enforcement Decree is scheduled to go into effect on April 23, 2025. 

13 April: The Thai Securities and Exchange Commission (SEC) will coordinate with relevant agencies to quickly enforce new restrictions on foreign digital asset platforms soliciting or advertising to Thai investors, following the implementation of recent emergency decrees on digital assets and cybercrime. 

10 April: The European Securities and Markets Authority (ESMA) finalized rules on firms’ order execution policies under MiFID II. The final report outlines rules for investment firms to establish and assess their order execution policies, aiming to enhance order execution and investor protection.

10 April: The Bank of England published the Prudential Regulation Authority (PRA) Business Plan 2025/26, focusing on banking and insurance sector safety, emerging risks, market competitiveness, and efficient regulation.

10 April: The Canadian Investment Regulatory Organization (CIRO) published its Annual Priorities for 2026, focusing on integration, regulatory delivery, and advancing its strategic plan to enhance efficient regulation, investor protection, and industry evolution. 

9 April: The Senate confirmed the nomination of Paul Atkins as Chair of the SEC. Chair Atkins was approved to serve for the remainder of Gary Gensler’s term, which expires June 5th, 2026. 

8 April: The U.K. Financial Conduct Authority (FCA) published its strategic priorities for 2025/2026, which include becoming a smarter regulator, supporting growth, helping consumers navigate their financial lives, and fighting financial crime through enhanced data-led detection and collaboration.

8 April: The U.S. Department of Justice (DOJ) disbanded its National Cryptocurrency Enforcement Team and refocusing crypto investigations on drug cartels and terrorist groups, while easing regulations on virtual currency exchanges and related services. 

7 April: The Hong Kong Securities and Futures Commission (SFC) issued guidance for licensed virtual asset trading platforms and SFC-authorized funds on staking services, emphasizing security, risk management, and expanding regulated offerings in Hong Kong’s virtual asset ecosystem. 

4 April: The U.S. Securities and Exchange Commission (SEC)‘s Division of Corporation Finance issued a statement clarifying that certain stablecoins designed to maintain a one-for-one value with USD and backed by low-risk assets do not constitute securities under federal law.

2 April: The International Organization of Securities Commissions (IOSCO) released its final report on “Standards Implementation Monitoring (ISIM) for Principles (6-7) Relating to the Regulator.” The report found high implementation levels across 55 jurisdictions, highlighting good practices and areas for improvement in managing systemic risk and reviewing the perimeter of regulation.

26 March: The House Financial Services Committee voted to advance stablecoin legislation, approving the STABLE Act. The bill will provide a framework for dollar-denominated stablecoins, including reserve requirements and anti-money laundering standards.