Polymarket users referred to prosecutors in South Korea: Report

South Korean police have forwarded 18 Polymarket users to prosecutors amid an investigation that has identified 26 people who together wagered about 17.6 billion won (approximately $12.7 million) on the platform. The referral follows a probe led by the Gangwon Provincial Police Agency, according to data reported to a Democratic Party lawmaker and cited by Asia Economy.

Authorities said they traced users by analyzing publicly available blockchain transactions, despite Polymarket operating as a noncustodial, peer-to-peer prediction market that settles via smart contracts and does not keep a conventional registry of real names. Police allege the platform’s structure, where participants stake assets on event outcomes, meets the legal definition of illegal gambling under South Korea’s Criminal Act.

Polymarket and supporters have characterized the service as a market for crypto-based derivatives, arguing it does not provide Korean-language services or accept won-denominated payments and that noncustodial mechanics mean it does not directly manage user funds. Regulators rejected those defenses, with the country’s media and communications review commission saying the platform’s winner-takes-all markets and its role in operating markets, setting trading rules, handling deposits and withdrawals, and collecting fees created an illegal gambling environment.

Legal experts quoted in reporting noted the line between prediction markets and gambling can be contested in court. A managing attorney at AXIS Law said transactions on Polymarket could satisfy legal criteria for gambling and that classifying them as prediction derivatives would be a difficult direct defense in criminal proceedings, though the ability to trade out of positions before settlement might factor into judicial assessment.

The Gangwon police launched South Korea’s first illegal gambling probe into domestic Polymarket users in June, and on Aug. 18 authorities moved to block access to the platform nationally after finding it provided what they deemed an illegal gambling environment. The case reflects growing enforcement scrutiny of decentralized crypto services that enable on-chain betting or prediction markets.