South Korean authorities have referred 18 users of the prediction market platform Polymarket to prosecutors as part of an investigation into alleged illegal gambling. The probe, led by the Gangwon Provincial Police Agency, involves 26 individuals who collectively wagered approximately 17.6 billion won ($12.7 million), with the largest single bet reaching 5.7 billion won.
Investigators identified the users through blockchain transaction analysis, citing Polymarket’s operations as violating South Korean gambling laws. The platform, which allows trading of contracts tied to real-world events, faces accusations of functioning as a gambling service rather than a derivatives market. Users and Polymarket have contested this classification, arguing their model is based on noncustodial, peer-to-peer smart contracts.
A Democratic Party lawmaker, Yoon Kun-young, received data from police detailing the investigation. Tae-Lim Kim, an attorney at AXIS Law, noted that while Polymarket describes its transactions as derivatives, legal arguments may struggle to counter claims of gambling under South Korean law. The Media and Communications Review Commission has previously argued that the platform’s structure encourages speculative betting.
South Korean authorities blocked Polymarket on August 18, citing regulatory concerns. The case highlights ongoing legal uncertainties around the classification of prediction markets and the enforceability of technical defenses in criminal proceedings.
Written by Oliver Grant
Markets Desk
