South Korean police have booked 26 Polymarket users over alleged illegal gambling involving 17.6 billion won, roughly $12.7 million, with 18 cases referred to prosecutors by Sept. 15.
The Asia Business Daily reported on Sept. 17, citing National Police Agency materials provided to lawmaker Yoon Kun-young’s office, that the Gangwon Provincial Police Agency Cyber Investigation Unit recorded a highest individual betting amount of approximately 5.7 billion won. The report was updated at 10:08 a.m. KST.
Digital Asset later reported from the same police material that investigators began preliminary inquiries in March and formally booked users from May. Police said a conventional list of domestic users was not available from the platform because Polymarket uses a non-custodial peer-to-peer structure, so investigators traced public blockchain transactions with open-source intelligence tools.
Polymarket users were traced through blockchain records
Police said public blockchain transaction data allowed investigators to identify individual users even though Polymarket does not maintain a real-name customer list in the form associated with centralized platforms. The published police material did not disclose the wallet addresses linked to the 26 suspects, preventing independent address-by-address checks of the reported wager totals.
As crypto.news reported in June, the Gangwon police inquiry had already become the first known South Korean investigation focused on domestic Polymarket users. Authorities at the time were examining whether event-contract activity could fall within the country’s gambling laws.
The newest police figures show that 18 of the 26 booked users had been referred to prosecutors by Sept. 15. The materials reviewed do not report indictments, trial dates or court judgments involving those cases.
Police say Polymarket trades can meet gambling rules
Investigators are relying on Article 246 of South Korea’s Criminal Act. The provision states that gambling can carry a fine of up to 10 million won, while habitual gambling can result in imprisonment of up to three years or a fine of up to 20 million won. The current text took effect on Sept. 13, 2026.
Police have cited a 2008 Supreme Court ruling addressing the role of chance in gambling. The court held that gambling can exist when property is wagered on an outcome the parties cannot certainly predict or freely control, even when a participant’s ability affects the result.
Applying that precedent, police told Digital Asset that Polymarket activity can satisfy Article 246 when users stake digital assets on an event and either receive settlement proceeds or lose their purchase amount depending on an uncertain result. Police said similarities to derivatives or the lack of a separate guideline do not automatically exclude gambling charges.
Users under investigation dispute that interpretation. The Asia Business Daily reported that their side describes Polymarket as a “virtual asset-based derivatives market” where probability contracts can be bought and sold before final settlement. That argument has not been accepted by a court in the cases reported so far.
Attorney Kim Tae-rim of AXIS Law told the publication that courts may examine structural features such as order-book trading and the ability to exit positions before maturity. Kim said the contracts claimed by users as prediction derivatives fall outside the existing Capital Markets Act framework, limiting the usefulness of that statute as a direct criminal defense.
South Korea blocked Polymarket before the referrals
South Korea’s Broadcasting, Media and Communications Review Committee voted on Aug. 18 to block domestic access to Polymarket after finding that the service provided what the regulator considered an illegal gambling environment to local users.
The committee focused on markets tied to politics, economics, sports, elections and weather, where users put assets at risk on events they cannot control. Regulators said Polymarket manages market rules and settlement infrastructure while receiving economic benefit from activity on the platform.
As crypto.news reported after the Aug. 18 decision, Polymarket argued during the review that its non-custodial P2P model, absence of Korean-language services and lack of Korean won payments meant it should not be treated as an operator of an illegal gambling venue.
The regulator rejected that position, saying “Technical characteristics or service structure do not constitute grounds for evading the applicability of domestic law.” It cited South Korea-focused markets and the platform’s winner-takes-all settlement structure when ordering access blocked.
The August action followed an earlier hearing process. Regulators had postponed a final decision while giving Polymarket time to present its position before the access restriction was approved the following month.
Polymarket’s U.S. venue operates under separate rules
Polymarket currently tells users that its international platform and its U.S. business operate through separate legal entities. Its website states that the international platform is not regulated by the U.S. Commodity Futures Trading Commission.
Polymarket US, by comparison, operates through QCX LLC. CFTC records list QCX LLC d/b/a Polymarket US as a designated contract market, with the designation dated July 9, 2025.
The U.S. structure does not change the legal basis stated by South Korean police. Investigators have based the domestic user cases on South Korea’s Criminal Act, while the media review committee has said a platform’s technical or service structure cannot by itself prevent the application of domestic law.
Polymarket affiliate had filed three National Futures Association applications connected with plans for margin trading. Those filings concern the regulated U.S. business and are separate from the South Korean police cases.
No court ruling identified in the reviewed South Korean sources has yet decided whether Polymarket’s order-book probability contracts fall outside Article 246 because of their claimed derivatives-like features. Eighteen case files have been sent to prosecutors, while the published police materials do not report an indictment decision or hearing date for any of the users.
Polymarket’s website continues to identify QCX LLC d/b/a Polymarket US as its CFTC-regulated designated contract market while stating that the international platform operates separately and is not regulated by the CFTC.
