South Korean authorities have launched the country’s first known investigation into users of crypto-powered prediction market platform Polymarket, marking a new step in the government’s efforts to regulate blockchain-based financial activities.
According to local media reports, the Gangwon Provincial Police Agency is investigating several South Korean residents for allegedly participating in illegal gambling through Polymarket. The inquiry was reportedly initiated following a request from the National Police Agency and covers users across multiple regions of the country.
The case could become a key test of how South Korea applies existing gambling laws to decentralized prediction markets that operate on blockchain networks.
Police examine crypto-based prediction trading
Polymarket allows users to trade on the outcomes of real-world events using cryptocurrency. Markets on the platform cover a wide range of topics, including elections, sports events, economic indicators, and geopolitical developments.
Built on the Ethereum blockchain, Polymarket relies on smart contracts to settle trades automatically, eliminating the need for a traditional intermediary.
South Korean authorities are now examining whether participation in these markets constitutes gambling under Article 246 of the country’s Criminal Act. The law restricts most forms of betting outside government-approved channels and provides for fines of up to 10 million won for gambling-related offences.
Investigators are focusing on individual users, as Polymarket’s decentralized structure makes direct enforcement against the platform more challenging.
Legal uncertainty surrounds Polymarket activity
Attorney Ahn Chang-bo, who represents some of the users involved, noted that elements commonly associated with gambling appear to be present. However, he also acknowledged that there is no established legal precedent in South Korea specifically involving Polymarket users.
While regulators have not blocked access to the platform, South Korean traders have reportedly continued to access Polymarket directly using dollar-backed stablecoins.
Interest in prediction markets surged during South Korea’s June 3 local elections, with substantial trading activity linked to election-related contracts.
Wider crypto enforcement efforts intensify
The investigation comes as South Korean authorities increase scrutiny of activities involving digital assets and decentralized platforms.
Earlier this year, prosecutors brought charges against individuals connected to the CATFI meme coin rug pull, a case widely viewed as the country’s first major prosecution involving a decentralized exchange under the Virtual Asset User Protection Act.
Globally, prediction markets are also facing growing regulatory attention. In the United States, authorities have charged a Google software engineer over an alleged insider trading scheme tied to crypto-based prediction market platform Polymarket, marking one of the highest-profile enforcement actions involving event contracts and digital asset trading platforms
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