South Korean police have booked 26 domestic Polymarket users in connection with alleged illegal gambling involving 17.6 billion won (roughly $12.7 million) in cumulative wagers. Eighteen cases had been referred to prosecutors by Sept. 15. Investigators traced users through public blockchain records after Polymarket’s non-custodial structure prevented conventional identification. South Korea blocked domestic access to the platform on Aug. 18 after regulators classified its prediction markets as gambling.
South Korean police have booked 26 domestic Polymarket users in connection with alleged illegal gambling involving 17.6 billion won (roughly $12.7 million) in cumulative wagers, crypto.news reported. Eighteen of those cases had been referred to prosecutors by Sept. 15.
The Asia Business Daily reported on Sept. 17, citing National Police Agency materials provided to lawmaker Yoon Kun-young’s office, that the Gangwon Provincial Police Agency Cyber Investigation Unit recorded a highest individual betting amount of approximately 5.7 billion won among the 26 investigated users.
Investigators Traced Users Through Blockchain Data
Digital Asset reported, drawing from the same police material, that investigators began preliminary inquiries in March and formally booked users starting in May. Police said a conventional list of domestic users was not available from the platform because Polymarket uses a non-custodial peer-to-peer structure.
Investigators traced public blockchain transactions using open-source intelligence tools to identify individual users, even though Polymarket does not maintain a real-name customer list of the kind associated with centralized platforms. The published police material did not disclose the wallet addresses linked to the 26 suspects.
As crypto.news reported in June, the Gangwon police inquiry had already become the first known South Korean investigation focused on domestic Polymarket users. The materials reviewed do not include any indictments, trial dates or court judgments involving those cases.
Police Cite Gambling Statute and Supreme Court Precedent
Investigators are relying on Article 246 of South Korea’s Criminal Act. The provision states that gambling can carry a fine of up to 10 million won, while habitual gambling can result in imprisonment of up to three years or a fine of up to 20 million won.
Police cited a 2008 Supreme Court ruling addressing the role of chance in gambling. The court held that gambling can exist when property is wagered on an outcome the parties cannot certainly predict or freely control, even when a participant’s skill affects the result.
Applying that precedent, police told Digital Asset that Polymarket activity can satisfy Article 246 when users stake digital assets on an event and either receive settlement proceeds or lose their purchase amount depending on an uncertain outcome. Police said that similarities to derivatives or the absence of a separate regulatory guideline do not automatically exclude gambling charges.
Users Dispute the Gambling Classification
Users under investigation dispute that interpretation. The Asia Business Daily reported that their defense characterizes Polymarket as a “virtual asset-based derivatives market” where probability contracts can be bought and sold before final settlement. No court has accepted that argument in the cases reported so far.
Attorney Kim Tae-rim of AXIS Law told the publication that courts may examine structural features such as order-book trading and the ability to exit positions before maturity. Kim said the contracts that users describe as prediction derivatives fall outside the existing Capital Markets Act framework, limiting the usefulness of that statute as a direct criminal defense.
South Korea Blocked Polymarket Access on Aug
South Korea’s Broadcasting, Media and Communications Review Committee voted on Aug. 18 to block domestic access to Polymarket after finding that the service provided what the regulator considered an illegal gambling environment to local users. The committee focused on markets tied to politics, economics, sports, elections and weather.
Polymarket argued during the review that its non-custodial peer-to-peer model, absence of Korean-language services and lack of Korean won payment options meant it should not be treated as an operator of an illegal gambling venue. The regulator rejected that position, stating: “Technical characteristics or service structure do not constitute grounds for evading the applicability of domestic law.”
The case sits at a crossroads for blockchain-based prediction markets and gambling regulation worldwide. The outcome could shape how regulators treat decentralized platforms that operate outside conventional licensing frameworks.
