Key Points
- Police in South Korea formally charged 26 individuals who used Polymarket with suspected violations of gambling statutes.
- Prosecutors now have jurisdiction over 18 of these cases as the investigation progresses to its next phase.
- Combined trading activity from these 26 individuals totaled approximately 17.6 billion won, equivalent to $12.7 million.
- Law enforcement officials maintain these prediction market contracts fall under Article 246 of the nation’s Criminal Act.
- Accused individuals counter that Polymarket functions similarly to cryptocurrency derivatives platforms since positions can be closed before event resolution.
- Domestic internet providers received orders in August to restrict access to Polymarket within South Korea, adding regulatory challenges for the platform.
Law enforcement authorities in South Korea have formally charged 26 domestic residents who used Polymarket with suspected gambling violations, marking an expansion of the country’s enforcement efforts against prediction market platforms. The National Police Agency reports that prosecutors have received 18 of these cases for potential legal proceedings.
The core legal dispute centers on whether event-based contracts on Polymarket constitute gambling under domestic legislation or whether they more closely resemble financial derivative instruments. Courts may ultimately determine this classification if prosecutors pursue formal penalties against the accused individuals.
Prosecution Phase Begins for Polymarket Investigation
The cyber investigation division of the Gangwon Provincial Police Agency’s examined 26 individuals through September 15. Their collective trading volume reached approximately 17.6 billion won, translating to around $12.7 million across markets covering political races, economic indicators, and social events.
Authorities identified one participant who accumulated trades valued at roughly 5.7 billion won, approaching $4.1 million. Investigators leveraged public blockchain data and open-source intelligence methods to track wallet transactions and establish connections to specific individuals.
Law enforcement officials assert these prediction market contracts violate Article 246 within South Korea’s Criminal Act. This statute addresses gambling activities where individuals wager property on uncertain outcomes beyond their influence.
Authorities reference existing judicial precedent classifying asset stakes on uncertain future events as gambling activity. Prosecutors will now evaluate the 18 forwarded cases to determine whether formal criminal charges under domestic law are warranted.
Accused Traders Challenge Gambling Designation
The 26 charged individuals maintain that Polymarket resembles cryptocurrency derivatives platforms in its operation. They emphasize the order book trading mechanism and the ability to exit positions prior to event conclusions.
This operational framework diverges from conventional fixed wagers, where participants typically await final outcomes. South Korean judicial authorities may need to determine whether these trading characteristics alter the legal categorization of prediction market instruments.
These enforcement actions follow an August directive from South Korea’s communications regulator requiring internet service providers to restrict domestic access to Polymarket. Regulators concluded the platform facilitated an unauthorized gambling environment for residents.
Polymarket maintained it provides no Korean-language interface, processes no won-denominated transactions, and operates through non-custodial infrastructure. Regulatory authorities dismissed these arguments, and the ongoing criminal cases now focus enforcement attention on individual participants and potential judicial interpretation of prediction market contracts. Court decisions in the months ahead could establish how domestic law applies to such trading activity.
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