South Korea’s Gangwon Provincial Police Agency has referred 18 Polymarket users to prosecutors over a combined 17.6 billion won ($12.7 million) in prediction market bets, Blockhead reported. Police identified 26 users in total by tracing public blockchain records and charged them under Article 246 of the Criminal Act. The case marks South Korea’s first legal test of whether prediction-market contracts constitute gambling or derivatives trading.
The largest single stake identified was about 5.7 billion won, or roughly $4.1 million, according to Blockhead’s reporting, which cited The Block’s coverage of the case.
How Police Identified the Users
Investigators traced publicly available blockchain records using open-source intelligence techniques, according to CryptoTimes’ coverage of the investigation cited by Blockhead. That approach allowed police to work around the absence of a conventional customer database on Polymarket’s non-custodial, peer-to-peer platform.
Police are charging the users under Article 246 of South Korea’s Criminal Act. They argue that betting on Polymarket’s yes-or-no event contracts constitutes gambling because users stake assets on outcomes they cannot control.
Users Dispute the Gambling Classification
Polymarket users have pushed back on that framing, Blockhead reported. They argue the platform functions more like a derivatives market, pointing to order-book trading and the ability to exit a position before an event resolves, rather than a one-way wager.
The dispute over classification sits at the center of the case. The source did not name any of the referred users or their legal representatives.
Regulator Blocked Polymarket in August
The charges follow a move by the Korea Communications Standards Commission to block domestic access to Polymarket in August, according to Blockhead. The regulator determined that the platform’s winner-takes-all structure and reliance on unpredictable real-world events created an illegal gambling environment.
The commission reached that conclusion regardless of Polymarket’s technical design or its lack of Korean-language service, Blockhead reported. It rejected Polymarket’s argument that its non-custodial structure placed the platform outside the reach of Korean law.
First Court Test for Prediction Markets in South Korea
The 18 referrals mark South Korea’s first cases testing how its courts will classify prediction-market betting, according to Blockhead. The outcome is likely to hinge on whether judges treat Polymarket’s contracts as gambling or as a form of derivatives trading.
No court has yet ruled on the distinction. The remaining eight users booked by police face further investigation before any decision on referral, Blockhead reported.
What Comes Next
Prosecutors will now decide how to proceed with the 18 referred cases. The source did not provide a timeline for prosecutorial decisions or court hearings.
The case is expected to set a precedent for how South Korean law treats prediction markets, a sector that has drawn increasing regulatory scrutiny in multiple jurisdictions.
