South Korea Refers 18 Polymarket Users to Prosecutors Over $12.7M in Bets

South Korean police have referred 18 Polymarket users to prosecutors over alleged illegal gambling. The escalation extends a months-long investigation into wagers placed on the platform’s election markets.

Lawmaker Yoon Kun-young’s office released the figures after receiving them from the National Police Agency. The case adds individual prosecutions to a broader crackdown on the prediction market platform.

What the Investigation Found

The Cyber Investigation Unit of the Gangwon Provincial Police Agency has formally investigated 26 users as of September 15. The 26 placed a combined 17.6 billion won, roughly $12.7 million, on Polymarket political, economic, and social markets.

One individual alone wagered about 5.7 billion won, close to $3.8 million.

Investigators traced bettors using open-source intelligence (OSINT) techniques applied to public blockchain transaction records. The method let them identify individual wallet holders despite the platform’s anonymous design.

Police argue the trades meet the legal definition of gambling under Article 246 of South Korea’s Criminal Act. They cite Supreme Court precedent holding that betting property on an uncertain outcome counts as gambling, regardless of skill.

The users under investigation counter that their trades resemble derivatives investing rather than wagering. That distinction will likely shape how the courts eventually rule.

Part of a Wider Crackdown in South Korea

The prosecutions follow a separate move by South Korea’s broadcasting and communications regulator. In August, the regulator ordered internet providers to block domestic access to Polymarket, citing its winner-take-all payout structure.

Polymarket argued that its lack of a Korean-language service and won payments should exempt it from local law. The regulator rejected that defense.

Attorney Kim Tae-rim of AXIS Law pointed to a key structural difference. Polymarket’s contracts trade on an order book and can be closed before expiry, unlike a typical bet.

Kim said that distinction may become a central issue for judges to weigh.

Polymarket already faces growing scrutiny from regulators worldwide over how it verifies and monitors traders. How South Korean courts classify its contracts could set a precedent for other jurisdictions weighing similar cases.

The post South Korea Refers 18 Polymarket Users to Prosecutors Over $12.7M in Bets appeared first on BeInCrypto.