Asia’s ongoing repression of cryptocurrency prediction markets is channeling investment, liquidity, and innovation to Western nations that opted for regulation.
In a report dated July 8, the Web3 research firm Tiger Research suggested that the characterization of prediction markets as unlawful gambling is hindering Asian countries from enjoying a thriving blockchain market. Instead of stopping demand, the legal constraints merely push users and business transactions onto international platforms and diminish consumer safety.
The growth of the sphere has been fueled by crypto-native platforms like Polymarket, where trades are settled on-chain. Tiger Research estimates that the volume of trade exceeds $14 billion every month; moreover, the leaders in the industry have an overall value of $40 billion.
According to the report, Prediction markets sell contracts that pay $1 if an event takes place and $0 if it does not; thus, predictions become real-time estimates of probabilities. Academic research has found these markets can produce informative forecasts. Meta’s reported Arena project is an example of the growing interest in this technology beyond crypto.
Asia keeps reaching for the ban hammer
The crypto prediction markets are mostly thought of by authorities across the Asian continent as illegal forms of gambling.
In January 2025, the Singapore Gambling Regulatory Authority took censorship actions against the Polymarket platform due to it being regarded as an unlicensed gambling website. Additionally, the usage of the platform was restricted across Taiwan during the 2024 presidential elections when users were punished for violating the election laws. In Thailand, the usage of the platform was later also deemed illegal when internet service providers were ordered to censor it, while China continues its long-standing ban on all gambling and cryptocurrency platforms.
At present, Polymarket has also expanded the list of countries where its platform is not available to include the nations of Iran, Iraq, Lebanon, Myanmar, North Korea, Singapore, Syria, Taiwan, Thailand, and Yemen. Users in Singapore, Taiwan, and Thailand are only allowed to close their positions in Polymarket as the platform does not allow them to place new bets.
The tendency of regulators to crack down upon crypto prediction markets continues throughout Asia. As indicated by Interexy, a company that specializes in blockchain development, India prohibited real-money online gaming in 2025, stating that the prohibition follows the actions taken against the opinion-trading platform Probo, which operates domestically.
The Philippines had also canceled the licenses for offshore gambling operations, Hong Kong warned that crypto prediction markets can be treated as illegal gambling, Indonesia froze more than 33,000 gambling-linked accounts, and Vietnam banned illegal gambling apps from app stores. Interexy concluded that regulators continue applying decades-old gambling laws instead of developing dedicated rules for crypto prediction markets.
Nonetheless, the demand continues to be robust. According to Chosun Daily, a South Korean betting exchange known as Opinion has surpassed a remarkable 2 trillion-won mark in its weekly trading volume since its inception, despite the stringent measures imposed by the country’s gambling regulations, highlighting that the regulations do not prevent gamblers from engaging in such activities and merely push them elsewhere.
The West chose to regulate, and cashed in
For the West, the course took a turn, and the difference is apparent in the money. Instead of completely prohibiting prediction markets, U.S. authorities have allowed regulated event contracts to coexist with crypto exchanges. As estimated by blockchain intelligence company TRM Labs, transaction volumes in prediction markets were around $1.2 billion per month at the beginning of 2025 and increased to over $20 billion in January 2026, with approximately 840,000 active wallets involved.
Polymarket and Kalshi have paved the way for the expansion. Kalshi functions as a designated contract market under the Commodity Futures Trading Commission. This particular status allowed its partners such as CNN and Robinhood to gain significant acceptance of event-type financial contracts.
Regulatory measures did not stop many experts from voicing their concerns. Former SEC Commissioner Joseph Grundfest cautioned that highly specific event contracts can make inside trading feasible and argued that Polymarket does not have anti-money laundering or know-your-customer regulations that are mandatory for financial markets in the US.
Similarly, distressed-asset investor Thomas Braziel called prediction markets “sports gambling wrapped in finance.” In addition, he warned that it is a matter of time before venture capital starts regretting its investments because of the high level of regulatory uncertainty. Regulators in the US also called to tighten oversight in the wake of the insider- trading scandal involving event-driven contracts.
Currently, the legal conversation in the United States focuses on whether federal commodities laws take precedence over state gambling regulations. This issue may eventually reach the Supreme Court, according to Grundfest. In Asia, however, the competitive implications are already showing.
Tiger Research states that relying on gambling prohibitions may lead to a loss of capital, liquidity, and innovations as other regions adopt regulated prediction-market frameworks. As Western markets refine their regulatory regimes, Asian countries are under more pressure to figure out if their existing gambling laws are still the best way of overseeing one of the fastest-growing industries in the crypto space.
