South Korean authorities have officially opened the country's first criminal investigation into domestic Polymarket users, with the Gangwon Provincial Police Agency's Cyber Investigation Division now actively tracking users' cryptocurrency transaction histories to identify individuals and issuing sequential summonses. According to lawyer Han Chang-bo, a former prosecutor specializing in gambling cases, he recently attended a suspect interrogation for a client who was summoned in connection with these charges. The investigation, which began as the country's first criminal probe into domestic Polymarket users, is being led by Gangwon Provincial Police following a request from the National Police Agency and is expected to be transferred to the Chuncheon District Prosecutors' Office upon completion. As reported by ChosunBiz, this represents the first criminal probe targeting South Korean users of Polymarket, the world's largest prediction market platform, signaling a hardening enforcement posture from South Korean authorities.
The investigation occurs under South Korea's comprehensive Virtual Asset User Protection Act, which was enacted as Act No. 19563 on July 18, 2023, and took effect on July 19, 2024. Under current law, betting on all gambling websites is illegal, except for Sports Toto, operated by the Korea Sports Promotion Agency, with domestic users potentially facing fines of up to ₹10 million - equivalent to 10 million Korean won, worth approximately $6,495 according to The Block. The case falls under Article 246 of the Criminal Act covering gambling and habitual gambling, with users potentially facing fines up to 10 million won, roughly $6,500. Attorney Han Chang-bo emphasized that the absence of a formal judicial precedent means users face significant legal uncertainty, noting that "it appears that the elements constituting the crime of gambling are met. However, since there have been absolutely no domestic cases of punishment for using polymarkets, it is difficult to predict the level of punishment."
The reported investigation followed a few days after South Korea's local elections on June 3, which spawned multiple sizable bets - particularly predictions for the Seoul mayoral election that drew in over $52 million according to The Block. According to Chosun Biz, markets tied to the country's June 3 local elections attracted betting activity worth hundreds of billions of won, with South Korean users reportedly able to access the platform directly and place trades using dollar-backed stablecoins. The investigation is reportedly examining trading activity linked to Polymarket markets on South Korea's June 3 local elections, where betting volumes reached tens of billions of won. As reported by Wu Blockchain, authorities noted that users accessed the platform directly, with no VPNs or IP-circumvention tools required, making it easier for participation to grow unchecked. Polymarket also reportedly allowed Korean users to place bets using dollar-backed stablecoins without imposing meaningful restrictions.
Despite the police treating Polymarket activity as gambling under South Korean law, neither prosecutors nor the courts have yet made a definitive ruling on whether using the platform constitutes a gambling offense under the country's criminal code. Attorney Han Chang-bo emphasized that the absence of a formal judicial precedent means users face significant legal uncertainty, noting that "it appears that the elements constituting the crime of gambling are met. However, since there have been absolutely no domestic cases of punishment for using polymarkets, it is difficult to predict the level of punishment." The case matters because South Korean law prohibits betting on platforms outside the state-authorized Sports Toto system, with betting activity tightly restricted. In May, a spokesperson for the Korea Communications Standards Commission told Bloomberg News that the agency had launched a formal review to determine whether the platform amounts to gambling or breaches national law. The investigation follows Indonesian authorities recently blocking local access to Polymarket as part of a wider crackdown on online betting, with the platform also blocked in India. Meanwhile, Bloomberg reported last month that Polymarket has hired a representative in Japan to offer prediction markets in the country, despite currently being restricted there.
Since launching in 2020, Polymarket has risen to prominence by allowing users to place crypto-based bets on major political, social, and sports outcomes. According to The Block's data dashboard, Polymarket and Polymarket U.S. have generated a combined cumulative volume of $88.6 billion as of June 5. The platform operates on the Ethereum blockchain using smart contracts to settle markets without a central intermediary. The case lands as Polymarket faces mounting sanctions and legal pressure, with the platform pushing traders to verify their identities. Polymarket is also courting new markets, including a reported bid for approval in Japan by 2030, despite currently being restricted there. The mounting scrutiny reflects broader concerns about unregulated online betting platforms operating beyond traditional regulatory frameworks, with authorities pushing forward with penalties against users potentially emboldening other jurisdictions to take similar action against participants in decentralized prediction markets.
