South Korean police have opened criminal cases against 26 users of the prediction market platform Polymarket and referred 18 of them to prosecutors over roughly 17.6 billion won, about $12.7 million, in bets tied to political, economic, and social outcomes.
The case, disclosed on September 17 through data from Democratic Party lawmaker Yoon Geon-young’s office, sets up a legal fight over whether trading on Polymarket counts as gambling under Korean law or something closer to a derivatives investment.
Blockchain Records and a Gambling Charge
According to a report from Asia Economy, the Gangwon Police Agency’s Cyber Investigation Unit had booked the 26 suspects as of September 15, and the largest single bet from one user reached about 5.7 billion won ($4.1 million).
Polymarket does not hold custody of user funds and settles wagers automatically in USDC or pUSD based on real-world outcomes, so it keeps no real-name list of who is trading. But law enforcement pulled public blockchain transaction records and used open-source techniques to trace the Korean users anyway.
Police argue the transactions amount to illegal gambling under Article 246 of the Criminal Code, pointing to a Supreme Court precedent holding that a bet counts as gambling once chance plays a role and money is staked on the result, even if skill also factors in.
Calling the trades an investment, in their reading, doesn’t change that a virtual asset is put at risk against an outcome nobody can know in advance.
The booked users argue Polymarket should be treated as a virtual asset derivatives market rather than gambling, and that is expected to become a central question once the cases reach court.
The setup could formally meet the legal definition of gambling according to attorney Kim Tae-rim of AXIS Law, since profits and losses turn on uncertain outcomes with virtual assets on the line.
South Korea Had Already Blocked Polymarket Access
The prosecutions have come after South Korea’s August 18 decision to block domestic access to Polymarket. As CryptoPotato reported then, authorities said the platform’s winner-takes-all structure, combined with betting on events outside users’ control, encouraged gambling behavior.
Polymarket had argued it fell outside Korean jurisdiction after dropping Korean language service and won-denominated payments, but the commission rejected that argument.
The prediction market has run into similar resistance well beyond Korea, with France, Australia and Germany restricting access, and Baltimore suing it and rival Kalshi last month over claims they operate as unlicensed sportsbooks.
Source: CryptoPotato
