Key Insights:
- South Korea launched its first probe into Polymarket users over suspected illegal gambling activity.
- Authorities are examining whether Polymarket trades violated Article 246 of South Korea’s law.
- The investigation may shape how South Korea applies gambling rules to prediction markets.
Polymarket has become the focus of South Korea’s first known investigation targeting users of a blockchain-based prediction market platform. Police are examining whether individuals who placed trades on Polymarket violated national gambling laws.
The South Korean authorities are now reviewing user participation across multiple regions. They are assessing whether existing gambling regulations apply to activity conducted through the platform.
South Korea Opens Investigation Into Polymarket Users
According to a report by Chosun Biz, the Gangwon Provincial Police Agency has launched an investigation into South Korean users of Polymarket. The inquiry began following a request from the national police headquarters.
The investigation covers users living throughout South Korea, including those residing in Gangwon Province. Authorities are examining whether activity on Polymarket constitutes illegal gambling under existing law.
Polymarket allows users to trade positions linked to the outcomes of real-world events. These occasions involve elections, sports activities, economic data, and political related events.
The platform operates on the Ethereum blockchain using smart contracts to settle markets. As a result, transactions take place without a traditional centralized agent.
South Korean law places strict limits on betting activity. According to Chosun Biz, government-authorized Sports Toto products remain among the few legal options available to bettors.
Those products carry a betting limit of ₩100,000, or approximately $65. Authorities are therefore reviewing whether activity conducted through Polymarket falls outside permitted betting frameworks.
Following this, investigators are assessing possible violations of Article 246 of the Criminal Act. The provision covers gambling and habitual gambling offenses carrying penalties that can include fines of up to ₩10 million.
Polymarket Case May Test Existing Gambling Laws
Attorney Ahn Chang-bo, who represents some users under investigation, told Chosun Biz that the legal elements required for a gambling offense appear to exist.
However, Ahn also noted that no known domestic precedent exists involving punishment for Polymarket participation. As a result, the investigation’s outcome remains uncertain.
Although regulators have not blocked access to Polymarket, South Korean users have reportedly continued to access the platform directly. Users have also been able to place trades using dollar-backed stablecoins.
According to Chosun Biz, markets connected to South Korea’s June 3 local elections attracted betting activity worth hundreds of billions of won.
Because the platform relies on decentralized infrastructure, enforcement efforts are expected to focus on individual participants. The investigation does not currently center on action against the platform itself.
Recent Enforcement Actions Extend Beyond Centralized Platforms
The Polymarket investigation follows other recent enforcement activity involving decentralized networks in South Korea.
In May, prosecutors charged several individuals in connection with the CATFI meme coin rug pull. Digital Asset described the case as the country’s first arrest and prosecution under the Virtual Asset User Protection Act involving a decentralized exchange.
Prosecutors alleged that the group promoted the Solana-based token through false social media posts before carrying out a rug pull. Authorities said investors suffered substantial losses as a result.
Outside South Korea, prediction markets have also attracted regulatory attention. U.S. authorities recently charged Google software engineer Michele Spagnuolo with insider trading tied to Polymarket contracts.
Prosecutors alleged he used confidential company information to profit from contracts linked to Google’s annual search rankings. Separately, the Commodity Futures Trading Commission filed a civil complaint, stating that insider trading laws apply to prediction markets.
