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- South Korean police referred 18 Polymarket users to prosecutors in an illegal gambling investigation involving 26 individuals who collectively wagered approximately 17.6 billion won ($12.7 million).
- While users argued that the platform operates as a crypto-based derivatives market, South Korean authorities blocked access to Polymarket and rejected its structural defenses, concluding that its winner-takes-all setup constitutes illegal gambling.
South Korean police have reportedly referred 18 Polymarket users to prosecutors as part of an illegal gambling investigation involving 26 people who collectively wagered about 17.6 billion won ($12.7 million).
The case matters because it shows how regulators in one major market are treating crypto-based prediction markets as gambling rather than as investment or derivatives-style products. According to the report, police said publicly viewable blockchain transactions helped identify users, while Polymarket disputed the legal characterization of its platform.
Probe centers on alleged illegal gambling under South Korean law
The report said the Gangwon Provincial Police Agency had placed 26 people under investigation as of Tuesday. Authorities reportedly concluded that activity on Polymarket constituted illegal gambling under South Korea’s Criminal Act.
Police said the largest amount wagered by a single user was about 5.7 billion won ($4.1 million). Users under investigation argued that Polymarket should be viewed as a crypto-based derivatives investment market instead of a gambling service.
The South Korean probe began in June, when Gangwon police launched what the report described as the country’s first illegal gambling investigation into local Polymarket users at the request of the National Police Agency.
Polymarket disputes the classification as authorities move to block access
The enforcement push widened on Aug. 18, when South Korean authorities moved to block Polymarket. The country’s media and communications review commission said the platform’s “winner-takes-all structure encouraged speculative gambling.”
Polymarket pushed back, saying it did not provide Korean-language services or support payments in Korean won. The company also said its noncustodial transaction structure and use of smart contracts meant it did not directly manage user funds.
That argument did not persuade regulators. The commission said Polymarket’s “technical characteristics did not exempt a service from South Korean law.”
The report also cited Tae-Lim Kim of AXIS Law, who said the transactions could meet the legal requirements for gambling.
What happens next is still unclear. The report said 18 users had been referred to prosecutors, but it did not say whether formal charges have been filed or what penalties could follow. It also remains unclear how South Korean courts, if the case proceeds, will ultimately classify Polymarket transactions.
Source: As reported by news.google.com.
