South Korea opens first probe into Polymarket users for alleged illegal gambling
Police launch nationwide inquiry
South Korea’s National Police Agency has begun investigating domestic users of Polymarket on suspicion of illegal gambling, according to local media reports on Friday. The probe is being led by the Gangwon Provincial Police Agency and is the country’s first investigation targeting participants of a blockchain-based prediction market rather than platform operators.
Police are reportedly tracing on-chain transaction histories and have started issuing summonses to users across the country. Authorities say they are focusing on whether South Korean residents placed bets on Polymarket in violation of local gambling rules.
Sports betting monopoly and possible penalties
South Korean law bans individuals from placing sports-related wagers anywhere other than Sports Toto, the state-approved betting service operated by the Korea Sports Promotion Foundation.
Anyone found to have used Polymarket for sports-related bets could face fines of up to 10 million Korean won, or around $7,300.
Triggered by Seoul mayoral race betting
The investigation follows the June 3 local elections, during which wagers on the Seoul mayoral race drew heavy trading activity. Local reports say total betting volume on the race on Polymarket exceeded earlier projections, and authorities suspect a significant share of this activity came from South Korean users, who were able to access the platform without tools such as VPNs.
The case marks a shift in policy, with enforcement moving from focusing on platforms and operators to pursuing individual market participants.
Regulator review still pending
In May, the Korea Communications Standards Commission began reviewing whether Polymarket’s event-based contracts violate local law after receiving a series of complaints.
The commission has not yet ruled on whether Polymarket’s services breach South Korean gambling statutes, leaving the platform in a gray regulatory area even as police pursue users.
Regional and global clampdown
Authorities in other Asian markets and Europe have taken similar steps against online prediction and betting platforms. Indonesian regulators have already blocked local access to Polymarket as part of a broader crackdown on online betting. The platform is also reported to be blocked in European countries such as Bulgaria and Portugal due to the absence of a valid gambling license, and remains restricted in India.
Despite the mounting regulatory challenges, Polymarket has reportedly appointed a representative in Japan to study potential entry into that market and explore how prediction services might be offered within local rules.
Polymarket’s rapid growth
Launched in 2020, Polymarket allows users to place cryptocurrency-based wagers on political, social, and sports events worldwide. Its global daily trading volume has recently reached as high as $176 million, highlighting a rapid surge in activity across its markets.
Combined transaction volume across Polymarket and its U.S. counterpart has climbed into the tens of billions of dollars, underscoring how quickly on-chain prediction markets have scaled, even as regulators question whether these services are functioning as unlicensed betting operations or as financial derivatives platforms.
Rising legal risk for market participants
Authorities in South Korea are now directly targeting users, leveraging publicly available blockchain data to identify domestic activity. That approach mirrors a broader global trend, as regulators and law enforcement agencies in multiple jurisdictions treat prediction market activity as a compliance and enforcement priority.
In the United States, the Department of Justice and the Commodity Futures Trading Commission have increased scrutiny of prediction and derivatives-style platforms, including cases tied to alleged insider trading and unregistered markets. These agencies have indicated they are willing to pursue individuals outside U.S. borders when activity touches U.S. markets or users.
For traders active on decentralized prediction platforms, the South Korean probe highlights the growing legal exposure tied to jurisdiction. Those operating from countries where such markets may be classed as illegal gambling now face higher odds that their activity—recorded permanently on public blockchains—could be tracked and used in enforcement actions.
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