South Korean police refer 18 Polymarket users to prosecutors in gambling case
Authorities say 26 users placed about 17.6 billion won in event-contract wagers; the case tests whether a non-custodial prediction market is treated as gambling under Korean law.
By The Third AnglePublished 5 min read
South Korean police reportedly used public blockchain records in an investigation of Polymarket users. Photo: Ev / Unsplash · Unsplash License
A user-level case, not an action against Polymarket
South Korean police have reportedly booked 26 local Polymarket users on suspicion of illegal gambling and referred 18 of them to prosecutors, according to reporting by The Block and Cointelegraph. The Gangwon Provincial Police Agency’s cyber investigation unit is said to have identified the accounts by reviewing public blockchain transactions and other open-source information.
The users allegedly wagered about 17.6 billion won, or roughly $12.7 million, across Polymarket contracts. The largest cumulative amount attributed to one person was about 5.7 billion won, according to the reports. Those figures describe stakes under investigation, not proven losses or criminal proceeds. Charges are not convictions.
The case concerns alleged user conduct. It is not a conviction, and the reports do not say that prosecutors have proved every transaction violated Korean law. The distinction matters because the platform’s legal status and the users’ individual actions may be evaluated separately.
Why event contracts are at the center of the dispute
Police reportedly relied on Article 246 of South Korea’s Criminal Act, treating wagers on outcomes that users cannot control as gambling. That theory puts the focus on the contract itself: a user buys exposure to a yes-or-no event, then receives a payout if the selected outcome wins.
The investigated users have argued that Polymarket should be viewed as a crypto-based derivatives market. Their position is that contracts trade through an order book, can be sold before expiry and settle through smart contracts rather than a traditional bookmaker. Whether those features change the legal analysis will depend on Korean courts and prosecutors, not on the platform’s preferred label.
South Korean regulators had already ordered domestic access to Polymarket blocked in August after deciding that the service created an illegal gambling environment. The investigation reportedly covers activity from a period when the platform was still reachable in the country, so the timing of access and the timing of the alleged wagers could become important.
The blockchain trail cuts both ways
Public ledgers can help investigators connect wallets, deposits and contract positions, but an address is not the same thing as a named person. The reports say police used on-chain analysis and other intelligence; they do not disclose the full evidentiary record, the identification method for each user or the defendants’ responses.
For prediction-market operators, the case shows how a non-custodial design can still create user-level legal exposure. A smart contract may execute automatically, yet local gambling, financial-market and consumer-protection rules can still apply to participants or service providers.
The next meaningful development is a prosecutorial decision or court filing that explains how Korean law applies to event contracts. Blockchain records do not settle legality. Readers should treat the reported charges as an allegation and not as a ruling that all prediction markets, or every Polymarket trade, are illegal.
