South Korea Probes $12.7M in Polymarket Bets

South Korean authorities have initiated criminal proceedings against 26 individuals for allegedly placing approximately $12.7 million in wagers on the prediction market platform Polymarket. Of these, 18 cases have been forwarded to prosecutors, marking a significant enforcement action concerning decentralized prediction platforms.

The core of the legal dispute centers on whether these bets constitute illegal gambling under South Korean law or can be classified as a form of derivatives investment. Police cite a Supreme Court precedent that defines gambling as staking money on uncertain outcomes, regardless of skill involved. They argue that using virtual assets on Polymarket falls under this definition, even if the platform automatically settles trades in stablecoins like USDC.

Users involved reportedly contend that Polymarket operates as a virtual asset derivatives market, a stance that is expected to be a key point of contention in any future court proceedings. This development follows South Korea's earlier decision in August to block domestic access to Polymarket, citing its winner-takes-all structure and focus on events outside users' control as encouraging gambling. The platform's attempts to distance itself from Korean jurisdiction by removing local language services and currency payments were unsuccessful.