South Korean police have opened criminal cases against 26 users of the prediction market platform Polymarket and referred 18 of them to prosecutors over roughly $12.7 million in bets tied to political, economic, and social outcomes. The case was disclosed on September 17 through data from Democratic Party lawmaker Yoon Geon-young's office.
The Gangwon Police Agency's Cyber Investigation Unit had booked the 26 suspects as of September 15, with the largest single bet from one user reaching approximately $4.1 million. Police traced the Korean users by analyzing public blockchain transaction records and using open-source intelligence techniques, despite Polymarket's non-custodial design that does not maintain a registry of user identities.
Gambling Charge vs. Investment Classification
Law enforcement argues the transactions constitute illegal gambling under Article 246 of the Criminal Code, citing a Supreme Court precedent holding that a bet qualifies as gambling once chance plays a role and money is staked on an outcome, even if skill also factors in. Police contend that calling the trades an investment does not change that a virtual asset is put at risk against an uncertain outcome.
The booked users argue Polymarket should be treated as a virtual asset derivatives market rather than gambling, and this classification is expected to become a central question once the cases reach court. According to attorney Kim Tae-rim of AXIS Law, the setup could formally meet the legal definition of gambling since profits and losses turn on uncertain outcomes with virtual assets on the line.
Broader Regulatory Context
The prosecutions follow South Korea's August 18 decision to block domestic access to Polymarket. Authorities cited the platform's winner-takes-all structure combined with betting on events outside users' control as encouraging gambling behavior. Polymarket had argued it fell outside Korean jurisdiction after discontinuing Korean language service and won-denominated payments, but the commission rejected that argument.
Polymarket has faced similar regulatory resistance internationally. France, Australia, and Germany have restricted access to the platform, and Baltimore filed suit against Polymarket and rival Kalshi last month over claims they operate as unlicensed sportsbooks.
