TL;DR
- Criminal Charges: Police booked 26 Polymarket users and referred 18 to prosecutors after determining their wagers met South Korea’s definition of illegal gambling.
- Regulatory Action: Authorities blocked domestic access to Polymarket, citing its winner‑takes‑all structure, market operations, crypto settlement features, and fee collection as evidence of an illegal gambling environment.
- Legal Debate: Users argued Polymarket functions as a derivatives market, but experts said the transactions likely satisfy gambling criteria.
South Korean authorities have escalated their investigation into activity on Polymarket, referring 18 of 26 identified users to prosecutors after determining that their wagers met the legal definition of illegal gambling. The group collectively placed about 17.6 billion won, worth $12.7 million, on event‑based contracts. Police say the largest individual stake reached 5.7 billion won, or $4.1 million, underscoring the scale of local participation in the prediction platform.
Police Trace Activity Through Blockchain Data
According to reports from Asia Economy and Asia Business Daily, the National Police Agency submitted data showing that the Gangwon Provincial Police Agency had booked 26 people and sent most of them to prosecutors. Investigators reportedly relied on publicly available blockchain transactions to identify users, noting that the prediction platform does not maintain real‑name customer records due to its noncustodial structure.
Police said that betting on yes‑or‑no outcomes on Polymarket constitutes illegal gambling under Article 246 of the Criminal Act because users stake assets on results they cannot control or predict with certainty. The charged individuals argued that Polymarket should instead be treated as a crypto‑based derivatives market, pointing to its order‑book trading and the ability to exit positions before settlement. Whether that distinction holds will be central if the cases proceed to court.
Regulators Move to Block Access
The widening crackdown follows Gangwon police launching South Korea’s first probe into local Polymarket users in June. On Aug. 18, authorities moved to block domestic access to Polymarket after determining that the platform created an illegal gambling environment. The media and communications review commission said Polymarket’s winner‑takes‑all structure encouraged speculative behavior and cited its role in operating markets, setting rules, handling crypto deposits and withdrawals, and collecting fees.
Polymarket countered that it does not offer Korean‑language services, does not accept Korean won payments, and does not directly manage user funds due to its smart‑contract‑based settlement. Regulators rejected the argument, saying technical design does not exempt a service from South Korean law.
Legal Experts Weigh In
Tae‑Lim Kim of AXIS Law told Asia Economy that Polymarket transactions could meet the legal threshold for gambling. He added that framing them as prediction derivatives may not serve as a strong defense, though the ability to trade contracts before expiration could influence judicial interpretation.
