Authorities in South Korea have initiated a probe into local users of the decentralized prediction platform Polymarket, marking what is believed to be the first such investigation in the country. The inquiry, led by the Gangwon Provincial Police Agency, follows a directive from national police headquarters and targets individuals suspected of engaging in unlawful gambling activities through the blockchain-based service.
Polymarket allows participants to trade positions on the outcomes of diverse real-world events, from political elections to sports matches, using Ethereum smart contracts. However, South Korean law strictly regulates betting, permitting only government-sanctioned options like Sports Toto, which comes with a modest stake limit. Authorities are examining whether these transactions violate Article 246 of the Criminal Act, which prohibits gambling and habitual gambling, carrying fines up to ₩10 million.
Attorney Ahn Chang-bo, representing some implicated users, acknowledged that the legal criteria for a gambling offense may be met but noted the absence of prior convictions for Polymarket usage, leaving the case without clear precedent. Despite no official blockade, South Korean users have reportedly accessed the platform and conducted trades using dollar-denominated stablecoins, with markets tied to local events attracting significant activity.
This investigation aligns with broader enforcement trends in South Korea, where regulators have recently applied existing laws to decentralized finance activities. In May, prosecutors charged individuals linked to a rug pull involving the CATFI meme coin on a decentralized exchange, signaling a shift toward policing actions beyond centralized platforms. Meanwhile, international scrutiny of Polymarket is also intensifying, as U.S. authorities have charged a Google engineer with insider trading linked to the platform, and the Commodity Futures Trading Commission has filed civil complaints, emphasizing that insider trading rules extend to prediction markets.