South Korea Probes Polymarket Users Over Gambling Law Concerns

South Korean police open first probe into Polymarket users amid gambling law concerns South Korean authorities have launched what is believed to be the country's first criminal probe targeting domestic users of Polymarket, the Ethereum-based prediction market, as investigators examine whether trading on the platform violates local gambling statutes. According to reporting from Chosun Biz, the Gangwon Provincial Police Agency — acting on a request from the national police headquarters — is investigating South Korean residents who used Polymarket. The inquiry spans users across the country, including those in Gangwon Province, and centers on whether participation in prediction markets constitutes illegal gambling under Article 246 of the Criminal Act. That statute carries penalties including fines up to ₩10 million (roughly $6,500). What’s being examined - Polymarket enables users to buy and sell positions tied to real-world outcomes — elections, sports, economic releases and geopolitical events — with settlement handled by Ethereum smart contracts rather than a central operator. - South Korea tightly restricts betting; aside from government-authorized Sports Toto products (which carry a ₩100,000, about $65, betting limit), most wagering outside state-sanctioned channels is broadly considered illegal. - Authorities are therefore probing whether trades on Polymarket meet the legal criteria for “gambling” or habitual gambling offenses. Scope and scale Chosun Biz reports that markets tied to South Korea’s June 3 local elections drew substantial activity — “hundreds of billions of won” in betting volume — equivalent to tens of millions of dollars. Investigators say many domestic users accessed Polymarket directly and placed trades using dollar-backed stablecoins. The decentralized nature of Polymarket’s infrastructure means enforcement is likely to target individual users rather than the platform itself. Legal uncertainty and defense Attorney Ahn Chang-bo, representing some of the users under investigation, told Chosun Biz that the factual elements required for a gambling offense appear present, but noted there is no domestic precedent for prosecuting Polymarket use, making outcomes uncertain. Broader enforcement trend The probe follows a broader pattern of South Korean authorities applying existing laws to decentralized crypto activity. In May, prosecutors charged parties over the CATFI meme-coin rug pull — described as the country’s first arrest and prosecution tied to a decentralized exchange under the Virtual Asset User Protection Act. Prosecutors said the case underscored that enforcement is no longer limited to centralized exchanges or locally listed tokens. Global scrutiny of prediction markets Polymarket has also drawn regulatory attention abroad. In the U.S., prosecutors charged a Google software engineer, Michele Spagnuolo, with insider trading for allegedly using confidential company information to trade Polymarket contracts tied to Google search rankings; the Commodity Futures Trading Commission filed a related civil complaint asserting that insider-trading rules apply to prediction markets. The platform has faced other legal challenges and regulatory scrutiny across several U.S. states as policymakers debate whether prediction markets should be treated as derivatives or as gambling. Why it matters The South Korean probe is a test case for how regulators will handle user activity on decentralized platforms. If authorities pursue criminal penalties against individual traders, it could signal a tightened enforcement posture toward crypto-native prediction markets and reinforce the legal risks for users who participate in off-exchange, blockchain-based betting markets.