Key highlights:
- South Korean police have referred 18 Polymarket users over alleged illegal gambling
- These individuals have allegedly placed combined wagers of $12.7 million
- The move comes as many countries, including the US, have increased their scrutiny
Another major legal challenge has hit prediction market platform Polymarket in South Korea. Police referred more than 18 Polymarket users to prosecutors over allegations of illegal gambling. The local users reportedly placed a combined $12.7 million in wagers on the platform, putting its activity under fresh scrutiny in the country.
South Korean police crack down on Polymarket users
South Korean police have accused around 26 local Polymarket users of engaging in illegal gambling. According to local reports, the Gangwon Provincial Police Agency’s cyber investigation unit has referred 18 individuals to prosecutors, as they have allegedly placed large wagers on the prediction market.
Notably, police found that the Polymarket users have placed combined wagers of around 17.6 billion won, or $12.7 million, on the prediction market platform. One user placed the largest bet, with cumulative wagers hitting around 5.7 billion won, or $4.1 million.
How did police identify the Polymarket users?
Interestingly, the South Korean police identified the prediction market users by tracking publicly available blockchain transactions. Polymarket does not keep a traditional list of users under their real names. So, the authority had to analyze on-chain activity to link the transactions to the individuals.
It is important to note that Polymarket allows users to buy and sell contracts based on the outcome of real-world events like sports, politics, etc. Using a peer-to-peer, non-custodial system, the platform allows transactions to settle automatically instead of a traditional betting operator.
According to South Korean authorities, these transactions could be considered illegal gambling under the country’s Criminal Act. They argue that users are putting capital at risk based on uncertain outcomes.
However, the accused users claim that they have seen Polymarket as a crypto-based derivatives market rather than a gambling platform. They strengthened their argument by pointing to the platform’s trade contracts, which could be closed before an event is settled.
South Korea joins global scrutiny of prediction markets
This is not the first time South Korea has turned against Polymarket. In June, the Gangwon Provincial Police Agency initiated the country’s first investigation into the prediction market platform. The move came in response to a request from the National Police Agency on allegations of suspected illegal gambling.
On August 18, things took a serious turn as the authority decided to block access to Polymarket. This led to the conclusion that the platform offered illegal gambling services to users. The commission stated that Polymarket’s winner-takes-all structure was an example of speculative trading. It also highlighted the platform’s role in running the market, settling trading rules, handling trades, and collecting fees.
Meanwhile, Polymarket pushed against the decision, arguing that it does not offer Korean-language services or accept payment in won. But the authority dismissed the argument, claiming that its technical design does not place it outside South Korea’s gambling laws.
Significantly, South Korea is not the only country that fights with prediction market platforms. These platforms like Polymarket and Kalshi are facing increasing scrutiny across the globe over illegal gambling allegations.
One of the most viral examples is in the US, where more than 44 states have turned against Polymarket. While many have moved to ban prediction market platforms, others are still in legal battles. Other countries like Singapore, France, Japan, and the UK have also taken action against these platforms.
Source:: 18 Polymarket Users Face Legal Action in South Korea Over $12.7M Bets