South Korean police have opened criminal cases against 26 users of the prediction-market platform Polymarket after tracing roughly 17.6 billion won, or about $12.7 million, in bets on political, economic, and social events. Authorities have already referred 18 of those users to prosecutors.

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Police action follows blockchain tracing

The investigation was handled by the Gangwon Police Agency’s Cyber Investigation Unit, which booked the suspects as of September 15. According to the report, the largest single account identified in the case placed about 5.7 billion won, or roughly $4.1 million, in wagers.

Although Polymarket does not keep a real-name trading list and does not directly hold user funds, investigators said they were able to identify users by following public blockchain transactions. The platform settles positions automatically in USDC or pUSD based on real-world outcomes.

Core dispute is whether the activity was gambling

The case turns on how South Korean authorities and defendants characterize trading on Polymarket. Police argue the transactions meet the definition of illegal gambling under Article 246 of the Criminal Code.

Investigators’ position, as described in the report, is that the assets being traded are virtual assets staked against uncertain outcomes. On that view, users were effectively placing wagers on future events rather than making a conventional investment.

Users are expected to frame Polymarket differently

The defendants are expected to argue that Polymarket should be treated more like a virtual-asset derivatives market than a gambling venue. That distinction could be central to how prosecutors and, eventually, courts assess the conduct.

Polymarket’s structure is part of that argument. The platform operates as a prediction market in which positions are settled automatically according to what happens in the real world, rather than through a traditional bookmaker holding customer balances.

The cases come after South Korea blocked access

The criminal cases follow a separate step taken by South Korean authorities on August 18, when domestic access to Polymarket was blocked. At the time, authorities said the platform encouraged gambling behavior.

The next confirmed step is the prosecutorial review of the 18 referred cases, while the broader legal question remains unresolved: whether Polymarket activity in South Korea will be treated as unlawful gambling or as a form of virtual-asset market participation.

Source: cryptopotato.com