South Korean police have booked 26 users of prediction market platform Polymarket in an alleged illegal gambling case tied to 17.6 billion won, or about $12.7 million, in wagers. By Sept. 15, investigators had referred 18 of those cases to prosecutors.
The case centers on whether trades placed on uncertain real-world events through Polymarket can be treated as gambling under South Korea’s Criminal Act. Police said they were able to identify individual users through public blockchain transaction data even though the platform does not keep a centralized real-name customer list of the kind used by many conventional exchanges or betting services.
Police outline basis for charges
Investigators are relying on Article 246 of South Korea’s Criminal Act. Under that provision, gambling can be punished by a fine of up to 10 million won, while habitual gambling can bring imprisonment of up to three years or a fine of up to 20 million won. The current text took effect on Sept. 13, 2026.
Police also cited a 2008 Supreme Court ruling on the role of chance in gambling. According to the ruling, gambling can exist when property is staked on an outcome that the parties cannot predict with certainty or freely control, even if a participant’s own ability may influence the result in some way.
How Polymarket activity is being characterized
Applying that precedent, police told Digital Asset that Polymarket activity can fall within Article 246 when users commit digital assets to an event and then either receive settlement proceeds or lose their purchase amount depending on an uncertain outcome.
Investigators argued that similarities to derivatives products, or the absence of a separate guideline specifically covering this type of platform, do not automatically prevent gambling charges. The published police material, however, did not include the wallet addresses tied to the 26 suspects, which means the reported wager totals could not be independently verified on an address-by-address basis from the disclosed record alone.
Regulators had already moved against access
Before the criminal cases were disclosed, South Korea’s Broadcasting, Media and Communications Review Committee voted on Aug. 18 to block domestic access to Polymarket. The committee said the service created what it considered an illegal gambling environment for local users.
Its review focused on markets linked to politics, economics, sports, elections and weather, where users risk assets on events outside their control. Regulators said Polymarket sets market rules, handles settlement infrastructure and receives economic benefit from platform activity.
Platform structure and the next legal step
Polymarket states that its international platform and its U.S. business are operated through separate legal entities. The company’s website says the international platform is not regulated by the U.S. Commodity Futures Trading Commission, while CFTC records show QCX LLC, doing business as Polymarket US, was designated as a contract market on July 9, 2025.
South Korean authorities said that corporate or technical structure does not alter the domestic legal analysis. Police have based the user cases on South Korea’s Criminal Act, and the media review committee has separately said that a platform’s service design alone cannot shield it from the application of local law. For now, the clearest confirmed next step is prosecutorial review of the 18 referred cases.
Source: crypto.news