South Korea’s Gangwon Provincial Police Agency has initiated a groundbreaking criminal investigation into domestic users of the decentralized prediction market platform Polymarket. This marks the first confirmed formal probe in the country targeting individuals for alleged illegal gambling via a blockchain-based prediction market, according to reports from Digital Asset and Chosun Biz.
The investigation was triggered by a request from the national police headquarters and spans users across the country, including Gangwon Province. Authorities are examining whether participation on Polymarket violates Article 246 of South Korea’s Criminal Act, which prohibits gambling and habitual gambling. Convictions can result in fines of up to 10 million won (approximately $6,500).
Polymarket, operating on the Ethereum blockchain, allows users to buy and sell outcome shares on real-world events such as elections, sports, and economic data. In South Korea, all private betting is tightly restricted—only government-authorized Sports Toto products are legal, with a ₩100,000 ($65) limit. Investigators allege that thousands of users bypassed these restrictions, with markets tied to South Korea’s June 3 local elections alone attracting bets worth hundreds of billions of won.
Attorney Ahn Chang-bo, representing some of the users under investigation, acknowledged that the legal elements for a gambling offense appear present. However, he noted there is no domestic precedent for punishing Polymarket usage, making the outcome uncertain. The case could set a pivotal standard for how South Korea treats decentralized prediction markets.
The probe underscores mounting tension between borderless DeFi platforms and national laws. While Polymarket itself is decentralized and not directly subject to a single country’s jurisdiction, individual users remain liable. This follows a recent South Korean crackdown on DeFi, including the first arrest and prosecution under the Virtual Asset User Protection Act over a Solana-based meme coin rug pull.
Internationally, prediction markets are also facing heat: U.S. authorities recently charged a Google engineer with insider trading on Polymarket, and the CFTC reiterated that insider trading laws apply to such platforms. The South Korean investigation may embolden other regulators to scrutinize decentralized betting venues.
