South Korean police identified and booked 26 Polymarket users through analysis of public blockchain transaction records, according to National Police Agency materials reported by Asia Business Daily. The Gangwon Provincial Police Agency's cyber investigation unit opened a preliminary inquiry in March and began booking suspects in May, months before Korea's broadcasting and communications standards body ordered the platform blocked on August 18.
As of September 15, police had referred 18 of the 26 booked individuals to prosecutors. The users under investigation staked a combined $12.7 million, with the largest single trader accounting for $4.1 million. The investigation is ongoing, and reported figures may increase.
How Police Traced Users
Because Polymarket operates as a non-custodial peer-to-peer market with no real-name roster of Korean users, police said obtaining a user list from the operator was unrealistic. Instead, authorities used open-source intelligence analysis of blockchain transaction records, which are publicly available, to identify and track individual users.
The Legal Classification Question
Suspects are charged with illegal gambling under Article 246 of Korea's Criminal Act. South Korean Supreme Court precedent establishes that gambling can be charged even when a participant's skill influences the outcome, provided chance also plays a role. Korean authorities argue that the absence of specific regulatory guidance for prediction markets does not exclude them from gambling provisions.
This classification dispute extends globally. Prediction market advocates contend that users analyze information to price event likelihood and trade contracts on an order book, making the activity a derivatives market rather than gambling. The European Securities and Markets Authority reached a similar conclusion that the EU retail ban already covers many prediction markets.
Attorney Kim Tae-rim at AXIS Law told Asia Business Daily that the formal elements of a gambling offense may be satisfied in Korea's case, noting that the decisive question is how courts assess the structural differences of order-book contracts that can be liquidated before expiry.
Broader Enforcement
Polymarket has faced regulatory action in multiple jurisdictions. Czechia ordered a 15-day ISP shutdown in July, Romania's ban was upheld in court in April, and the Dutch regulator imposed a €487,000 penalty in June. Korea's approach of targeting individual players has precedent: Tokyo police referred ten customers of overseas online casinos who gambled with cryptocurrency in November 2024.
