One South Korean Polymarket user allegedly placed contracts worth KRW5.7 billion.
That figure sits inside a broader police investigation involving 26 domestic users and approximately KRW17.6 billion in cumulative activity. Gangwon Provincial Police have referred 18 of those users to prosecutors on suspicion of illegal gambling, according to information provided to National Assembly member Youn Kun-young.
No court has convicted them, and the investigation remains open. The importance of the case lies beyond the amounts involved.
South Korea must decide what a prediction market actually sells.
Polymarket allows users to buy positions linked to political, economic, sporting and cultural outcomes. Each position trades between zero and one dollar, with its price commonly read as the market’s estimated probability of an event occurring. Users can sell before settlement rather than waiting for a final result.
That structure gives the product three competing identities.
Supporters describe it as an information market that aggregates knowledge more efficiently than polls or expert forecasts. Traders can approach it as a speculative instrument whose price changes as new information enters the market. Gambling authorities see money being placed on uncertain events, with participants receiving a return when their prediction proves correct.
South Korean police have adopted the third interpretation. The investigated users reportedly argue that they traded cryptocurrency-based probability contracts rather than placing conventional bets.
The distinction cannot be resolved by vocabulary alone.
Calling a position a contract does not necessarily prevent it from being treated as gambling. Equally, the ability to buy and sell before an event is resolved makes the product structurally different from a normal sportsbook wager. Any eventual judicial decision may depend on its economic substance: what users purchased, how prices were formed, how returns were generated and whether information meaningfully reduced the role of chance.
The investigation also exposes an unusual feature of blockchain-based betting and trading platforms.
Offshore crypto products are often treated as difficult enforcement targets because they operate beyond domestic licensing systems and move value through digital wallets. In this case, the public transaction record appears to have helped investigators. Korean reporting says police used blockchain data and open-source intelligence to trace activity and identify users.
The platform may operate outside Korea, but its customers are not necessarily invisible.
This offers authorities an alternative to pursuing an overseas company. They can block local access, investigate domestic promotion and payment routes, and reconstruct individual activity from public wallet histories. A prediction market may remain technically available while participation becomes increasingly risky.
The implications extend to the companies building and distributing these products.
Geoblocking alone may not provide sufficient protection if users enter through alternative routes. Know-your-customer controls, local marketing, affiliate relationships and the handling of restricted jurisdictions can all become relevant. Prediction-market operators also cannot assume that classification in one country will transfer to another.
A platform recognised as a financial venue in one jurisdiction may be treated as an unlicensed bookmaker elsewhere. Crypto settlement and continuous trading do not remove that conflict; they make the same product legible to several regulatory systems at once.
South Korea could become an important test because its authorities are examining users directly rather than waiting for a comprehensive prediction-market framework. Prosecutors must now decide whether to advance the cases, while courts may eventually accept, reject or narrow the police interpretation.
The immediate question concerns 18 referrals.
The larger one is whether an event contract changes legal identity when it crosses a border.
For prediction markets considering East Asia, the answer will shape much more than compliance. It could determine where they can advertise, which partners they can use, how they screen customers and whether their product can be offered at all.
We track how money, players and regulation move across East Asia's gaming markets — including the parts that don't show up in the official figures. If that's your world, reply. The best context usually comes from comparing notes.
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East Asia Reports
Web: eastasiareports.com · Email: [email protected]
Author — Adrià Mas Rodríguez