(Bloomberg) -- Peter Thiel’s venture-capital firm Founders Fund is betting on one of the largest crypto-based prediction markets even as a key US regulator steps up efforts to restrict activity on such platforms.

Polymarket has raised $70 million across two rounds, with the most recent raise led by Founders Fund, a spokesperson said. The company, which also counts Ethereum co-founder Vitalik Buterin among backers, has been attracting users predicting the outcome of various events, with bets on the 2024 US presidential elections turning into the most popular contract on its platform.

The new investment comes on the heels of a proposed ban on trading of derivatives betting on political contests and sports games from the US Commodity Futures Trading Commission as it cracks down on so-called event contracts. Polymarket was previously fined by the CFTC and as part of a settlement promised to wind down services in the US, continuing to operate abroad.

“A lot of the reason why certain people don’t like prediction markets in the US kind of dates back to pretty puritanical thinking about betting,” Joey Krug, a partner at Founders Fund said about the CFTC proposal. “In the short- to mid-term it’s good for Polymarket because they are targeting non-US markets. In the long run, it will be good if Americans can participate in this market too.”

Election betting has driven the biggest surge in activity on Polymarket, with more than $170 million wagered on events tied to the US elections, according to its website. Former President Donald Trump has even shared Polymarket odds on the likelihood of his return to the White House.

Thiel, a libertarian who disdains regulation, has shown an affinity for the cryptocurrency marketplace — describing its growth as a rebuke of the world’s financial systems. The Polymarket investment is the first that Founders Fund has made in a platform that facilitates event-betting contracts, according to Krug.

In a bid to repair its relationship with regulators, Polymarket brought on former CFTC head J. Christopher Giancarlo as the chairman of its advisory board, months after its 2022 regulatory settlement.

The predictions platform is led by 25-year-old founder Shayne Coplan, and lets users trade topics far beyond elections — such as how many times Elon Musk will post on X or what GameStop Corp.’s stock will do. Polymarket lets customers buy dollar-backed stablecoin USDC and fund purchases of shares. It doesn’t take custody of customer money or digital tokens, and it just displays existing markets on the Ethereum blockchain.

A Polymarket spokesperson said that Founders Fund led a $45 million Series B funding round. General Catalyst had earlier helped the company raise $25 million in a Series A round. The new funding values the company — with no revenue at the moment — at a lower level than previous discussions. The company was eyeing a valuation of almost $1 billion before the CFTC action, Bloomberg previously reported.

“When we think about the US market as well as investing, researching into it, we know that is likely not something that will pay dividends immediately,” Coplan said in an interview. “Ultimately we have the deep conviction that markets on all the things that people are wondering about and have opinions on will exist.”

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