South Korean police investigate 26 Polymarket users on illegal gambling suspicions
Investigators have referred 18 of the suspects to prosecutors.
South Korea.- Police in South Korea’s Gangwon province have this year investigated 26 users of the prediction market Polymarket on suspicion of illegal gambling. Investigators say they traced roughly KRW 17.6 bn (US$12.7 m) in combined wagers using public blockchain records and have referred 18 of the 26 suspects to prosecutors.
The details come from National Police Agency materials shared with lawmaker Yoon Kun-young’s office and cited by the Asia Business Daily. The largest single user had placed bets worth about KRW 5.7 bn (US$4.1 m).
Investigators reportedly opened preliminary inquiries in March and moved to formal charges in May. Because Polymarket has no real-name account system and runs on a peer-to-peer blockchain structure, police used open-source intelligence tools to trace transactions and identify users instead of pulling records directly from the platform.
The investigations come under Article 246 of South Korea’s Criminal Act. Violations can carry a fine of up to KRW 10m (about US$7,200). Habitual gambling can bring up to three years in prison or a fine of up to KRW 20m (about US$14,000).
Police pointed to a 2008 Supreme Court ruling that defines gambling as staking property on an outcome no one can reliably predict or control, even if skill plays some role. Based on that ruling, investigators argue that Polymarket qualifies as gambling whenever users stake digital assets on an event and either win a payout or lose their stake depending on the result. “Similarities to derivatives or the lack of a separate guideline do not automatically exclude gambling charges,” police told the Asia Business Daily.
The suspects reportedly contest that interpretation and claim that Polymarket is a market for trading derivatives. Attorney Kim Tae-rim, of AXIS Law, told the Asia Business Daily that courts may look closely at the order-book system and the ability to close positions early. He said, however, that the contracts fall outside South Korea’s Capital Markets Act.
South Korea’s Broadcasting, Media and Communications Review Committee voted on August 18 to block access to Polymarket in South Korea. The committee found the platform offered what it considered to be illegal gambling.
