South Korea Is Coming for Polymarket Users, and the Platform Itself May be Next
South Korea’s regulatory pressure on Polymarket has escalated in two distinct stages over the past month.
The first stage targeted users, and it appears the second is targeting the platform itself. In early June, the Gangwon Provincial Police Agency opened South Korea’s first known criminal investigation into domestic Polymarket users, acting on a request from the National Police Agency. Investigators identified users by tracing crypto transaction records and summoned them one by one for questioning on suspicion of violating Article 246 of South Korea’s Criminal Act, which covers gambling and habitual gambling offenses.
The probe focused on users who placed bets on markets tied to South Korea’s June 3 local elections, with trading volume on those markets reaching tens of millions of dollars. Any users found guilty face fines of up to 10 million won, roughly $6,500, with habitual gambling carrying up to three years imprisonment.
This week, South Korea’s Broadcasting, Media and Communications Review Committee opened a formal hearing process targeting the platform directly, giving Polymarket an opportunity to submit its position before the committee decides whether to issue a corrective request. The committee said the additional step would verify both the legality of the service and the way it operates. Under South Korea’s National Gambling Control Commission Act, authorities can designate online services that facilitate speculative gambling as illegal gaming businesses, giving them the power to restrict access or compel operational changes.
Polymarket Was Built to Evade, but Investigators May Have Found a Path
Polymarket’s decentralized architecture was designed to create distance between the platform and its users. Smart contracts settle markets on the Ethereum blockchain so that no central operator processes bets. Transactions flow through dollar-backed stablecoins. That structure makes it difficult to shut the platform down in the conventional sense: there is no server to seize and no domestic entity to directly sanction.
South Korean investigators have creatively discovered a different path. Blockchain transactions are public and traceable. By matching on-chain transaction records to known Korean wallet addresses, police identified individual users and summoned them for questioning without needing to touch the platform’s infrastructure. The decentralized model that protects the platform creates no protection for the users who interact with it.
Attorney Ahn Chang-bo, a former gambling-case prosecutor now representing some of the users under investigation, told Korean media that the legal elements of a gambling offense appear to be present. No domestic precedent exists for prosecuting Polymarket use specifically, making the ultimate outcome uncertain. But the direction of the investigation is clear: police are treating the trades as gambling acts occurring on South Korean soil, regardless of where the platform is incorporated or operated. The fact that the markets in question revolve around South Korean local elections helps the case of investigators.
South Korea’s Supreme Court has previously confirmed that domestic users can be prosecuted under the National Sports Promotion Act for placing bets through overseas-operated online wagering sites, provided the betting itself occurs within the country. That precedent is directly applicable to the current situation. Polymarket’s offshore incorporation provides no automatic shield for its Korean users.
The platform’s own culpability argument becomes relevant at the committee stage. Polymarket states publicly that its access restrictions cover 33 countries, including the United States and several EU member states. Somewhat surprisingly, South Korea is not on that list. The platform offers a Korean-language interface and has remained accessible to South Korean users throughout the investigation. That combination of local-language support and unrestricted access strengthens the committee’s argument that Polymarket is not passively available to Korean users but is actively serving them, a distinction that matters both for platform-level liability and for any corrective order the committee might issue.
South Korea Is the Newest International Battlefield for Prediction Markets
The South Korea investigation is part of a broader international pattern in which domestic US regulatory coverage of prediction markets tends to be underweight. Spain blocked access to both Polymarket and Kalshi earlier this year while investigating whether the platforms operated without gambling licenses. The US-based regulatory fights, which we have covered extensively across the CFTC, the Sixth Circuit, and multiple state attorney general actions, have consumed most of the industry’s attention. But those fights concern the specific question of whether CFTC-licensed products are preempted from state gambling regulation. Outside the United States, that question is completely irrelevant.
Foreign regulators apply their own gambling statutes, and most of those statutes do not include a CFTC licensing carve-out. A platform that successfully argues its sports-event contracts are federally regulated swaps beyond the reach of Ohio’s gambling laws faces a completely different analysis in South Korea, where the Commodity Exchange Act carries no weight, and the question is simply whether prediction-market trading meets the local definition of gambling. In South Korea’s case, the early legal assessment suggests it does.
The CFTC was also reported this week to be conducting a broader investigation into Polymarket’s business activities, including its social media operations, following allegations that the platform promoted simulated trading videos through paid content creators without adequate disclosure. US-linked wallets traded roughly $571 million in political contracts on Polymarket over the past year despite the platform’s stated restrictions on American users, according to on-chain research. That figure, treated as directional rather than exact by the researchers who produced it, suggests Polymarket’s geoblocking practices are less airtight than its terms of service imply.
The South Korean investigation is an early-stage proceeding with an uncertain outcome. The committee hearing gives Polymarket a formal opportunity to contest the gambling characterization before any corrective order is issued. Whether that opportunity produces a different result than the arguments being made in US state courts is a question the next several months will answer. What is already clear is that the platform’s international regulatory exposure is wider and potentially more varied in its legal theories than its domestic battles suggest.
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