Crypto startup uses polymarket to bet on company funding, blinding backers

P2P.me was founded to push the boundaries of stablecoins, but the startup decided that betting on itself via Polymarket might have been too much of a bridge.

On Saturday, the Coinbase Ventures and Multicoin Capital-backed company apologized for using prediction markets to speculate about its latest funding round and explained the move. post As for X, it was denounced as an inappropriate attempt to communicate the conviction to the public.

The company, which describes itself as a non-custodial service for exchanging stablecoins and cash, indicated that its profits from predicting market movements totaled less than $15,000. Still, I recognized how a small paycheck could have a huge impact.

P2P.me said it had “caused confusion and damaged trust.” “We should have let the work, the product, and the mission speak for themselves. That was our mistake.”

As prediction markets have exploded in popularity, so have concerns that the platforms could be misused by insiders with access to sensitive information. recent enforcement action and arrest P2P.me has focused on individual behavior; It’s my fault This shows that questionable choices can also occur at the corporate level.

P2P.me’s bet centered on MetaDAO, a Solana-based fundraising and governance platform. With $140 million in play, some of the company’s bets could have won. P2P.me It was done through MetaDAO, but the one that was a hit hinged on the $6 million milestone.

in post Prohp3t, a pseudonymous co-founder of MetaDAO, told X that had he known what was about to happen, the platform would have encouraged P2P.me to avoid Polymarket. They did not support the act, but argued that it resembled an “over-the-top guerrilla marketing stunt.”

In the name of investor protection, Prohp3t said MetaDAO will facilitate refunds to investors who wish to exit before P2P.me’s public funding ends on Tuesday. a spokesperson said decryption The company had requested a refund of $20,000 of the $6.7 million committed.

The move was a surprise even to P2P.me’s biggest supporters. Some people were unaware that the India-based stablecoin company was betting on their company’s funding, two people familiar with the matter said. decryption.

Before starting to raise money on MetaDAO, P2P.me raised $2 million in a seed funding round led by Coinbase Ventures and Multicoin Capital. A Coinbase Ventures spokesperson said: decryption The company has not allocated beyond its initial funding.

At the time P2P.me placed its bet on Polymarket, the company said on X that it had only received a “verbal promise” of $3 million from Multicoin, which was not binding. Moreover, the bet was placed 10 days before the public fundraising campaign was launched, the company added.

P2P said named polymarket account “P2P Team” to increase transparency. In total, this account made 27 predictions. His biggest win to date, $8,173, came in January. The company was betting that another MetaDAO project would not win a $100 million contract.

Days before MetaDAO’s funding launch on March 25th, Polymarket said It announced that it had updated its rules to prohibit insider trading. The platform makes clear that it rejects trading on stolen information or illegal tips, or on individuals with “sufficient authority or influence to influence the underlying outcome of an event.”

decryption has reached out to Multicoin and Polymarket for comment.

P2P.me spokesperson mentioned decryption The company’s previous posts about X, including: one It has been viewed over 620,000 times. The company said it does not believe it is “trading based on completed trades,” but that it will continue to implement its company policy regarding prediction market trading.