Key facts
- South Korean police referred 18 Polymarket users to prosecutors in an illegal gambling investigation.
- The investigation involves 26 people who wagered approximately 17.6 billion won ($12.7 million).
- The largest amount wagered by a single user was about 5.7 billion won ($4.1 million).
- Police identified users by analyzing publicly available blockchain transactions.
- Authorities stated Polymarket transactions constitute illegal gambling under South Korea’s Criminal Act.
- Polymarket users argued the platform should be treated as a crypto-based derivatives investment market.
South Korean authorities have reportedly referred 18 users of the prediction market platform Polymarket to prosecutors as part of an illegal gambling investigation. The probe involves 26 individuals who allegedly wagered approximately 17.6 billion won ($12.7 million) on real-world event outcomes. Police identified users by analyzing publicly available blockchain transactions.
According to Asia Economy, data submitted by the National Police Agency to the office of Democratic Party lawmaker Yoon Kun-young showed that the Gangwon Provincial Police Agency had placed 26 people under investigation and sent 18 of them to prosecutors. The largest amount wagered by a single user was about 5.7 billion won ($4.1 million).
Authorities stated that Polymarket transactions constitute illegal gambling under South Korea’s Criminal Act because users stake assets on outcomes that cannot be predicted with certainty. The users, however, argued that Polymarket should be treated as a crypto-based derivatives investment market. Tae-Lim Kim, managing attorney at AXIS Law, told Asia Economy that while transactions could meet legal requirements for gambling, the ability to trade contracts and exit positions before settlement might be relevant in court.
In June, Gangwon police launched South Korea’s first illegal gambling probe into local Polymarket users. On Aug. 18, South Korean authorities moved to block Polymarket, citing its winner-takes-all structure as encouraging speculative gambling. Polymarket argued that its noncustodial transactions and use of smart contracts meant it did not directly manage user funds, but the country’s media and communications review commission rejected this, stating technical characteristics did not exempt the service from South Korean law.