South Korea blocks Polymarket as prediction markets face global split

South Korea has blocked Polymarket and referred 18 of its users to prosecutors over suspected illegal gambling. Beyond the 17.6 billion won involved, this development highlights a deepening global divergence in how crypto prediction markets are regulated.

This regulatory split is becoming increasingly difficult to overlook. While South Korea treats event contract trading as criminal gambling, the United States classifies it under derivatives regulations. Heavier enforcement in South Korea—one of the world’s largest retail crypto markets—may not actually suppress demand. Instead, it could push platforms to implement tighter geofencing while driving users and liquidity toward jurisdictions with clearer regulatory frameworks.

Eighteen users referred, one platform blocked

South Korean law enforcement reported that 26 Polymarket users faced charges on September 15, with 18 of those cases forwarded to prosecutors. Total funds utilized by these individuals reached 17.6 billion won, with a single user accounting for 5.7 billion won of that amount.

On August 18, the Korea Media and Communications Standards Commission (KMCSC) voted to block access to Polymarket within South Korea, determining that the platform facilitated illegal gambling under provisions of the Criminal Act and the National Sports Promotion Act. The Commission dismissed Polymarket’s arguments that it lacked South Korean jurisdiction because it had removed the Korean-language version of its site, eliminated won-denominated payment methods, and required users to own their Polymarket accounts.

Article 246 of South Korea’s Criminal Act penalizes gambling, while Article 247 targets the operation of gambling houses. For Polymarket, the core legal question is whether its platform features—such as an order-book model, probability-based contracts, and the ability to exit a position prior to final settlement—fall outside the scope of these statutes.

Gambling law meets the event-contract defense

At the heart of the dispute are differing definitions. South Korean authorities emphasize that participants wager money on uncertain outcomes, whereas advocates for prediction markets point to their mechanics, arguing that prices reflect collective expectations and that contracts can be sold prior to expiration.

According to a report from Tiger Research, a standard contract yields a $1 payout if a specified event occurs and nothing otherwise. Consequently, contract prices represent the probability of an event happening, with an oracle determining the final outcome upon contract maturity. This distinction sits at the center of the debate over how these financial instruments should be classified.

A top-two crypto market, not on Polymarket’s block list

Given the scale of South Korea’s financial sector, this crackdown extends far beyond local enforcement. Blockchain analytics firm TRM Labs ranked South Korea second globally in retail crypto volume at approximately USD 69 billion, trailing only the United States at roughly USD 212 billion, according to the Global Crypto Adoption Index for the first quarter of 2026.

A noticeable discrepancy also exists between Polymarket’s access policies and Korean enforcement actions. Updated on August 14, Polymarket’s geographic restrictions exclude 39 countries—including Japan, North Korea, Singapore, Taiwan, and Thailand—yet South Korea is absent from both its fully blocked and close-only restriction lists.

This mismatch demonstrates that national law enforcement can introduce compliance hazards that go beyond a platform’s self-imposed geographic filters.

Why the West’s regulated path is pulling liquidity

Prediction markets already wield significant influence. Data from DeFiLlama indicates $390 million in total value locked and $4.4 billion in weekly trading volume across prediction markets, with Polymarket alone generating $4 billion in monthly trading volume.

Meanwhile, the U.S. government has pursued a different approach. As the U.S. Commodity Futures Trading Commission (CFTC) oversees designated contract markets (DCMs) like Kalshi, it has advocated for federal oversight of event contract markets in recent regulatory submissions.

This structured regulatory pathway has allowed event contract markets to expand their user base through collaborations with organizations like CNN and Robinhood. As Cryptopolitan has previously observed, restrictive policies in certain Asian markets may push users, trading liquidity, and innovation toward regulated Western platforms.

South Korea’s enforcement actions only widen this gap. The broader significance of the situation extends past the 17 individuals facing criminal charges, touching on prediction market liquidity, regulatory compliance, and the future trajectory of these platforms.

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