South Korea moves to block Polymarket

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South Korea blocks Polymarket

Highlights

South Korea has ordered access to Polymarket blocked.
Regulators classified its structure as facilitating illegal gambling.
Decentralized technology did not exempt it from local law.

The Broadcasting, Media and Communications Review Committee approved a corrective request on Aug. 18 after examining Polymarket’s market creation, trading rules, crypto deposits, withdrawals, and settlement process. Regulators also considered the transaction fees generated by trading and concluded that parts of the service could fall under criminal and sports-betting restrictions, Crypto.News reported.

Regulators reject the decentralization argument

Polymarket allows users to buy and sell shares linked to outcomes ranging from elections and economic events to sports and weather. Contracts typically settle at a fixed value depending on whether the predicted outcome occurs, creating substantial gains for winning positions and losses for unsuccessful ones.

South Korean authorities focused on the platform’s role in establishing markets and providing the infrastructure needed to trade and settle positions. Although transactions take place between users through smart contracts, regulators determined that the technical structure did not remove the service from domestic gambling laws.

Polymarket argued that it does not directly hold customer funds and operates through non-custodial peer-to-peer transactions. It had also removed its Korean-language service and does not support direct payments in South Korean won. Those changes failed to satisfy regulators because residents could still access prediction markets using cryptocurrency.

Regulatory pressure spreads across prediction markets

The South Korean action follows an earlier investigation into residents accused of using Polymarket for election-related wagers. Authorities also examined markets directly relevant to the country, including a contract tied to rainfall in Seoul, reinforcing concerns that the platform continued targeting events of interest to local users.

The decision adds to restrictions imposed on Polymarket in several other markets, including India, the Czech Republic, France, Spain, Australia, and Germany. The pattern highlights a fundamental regulatory problem for prediction markets: a decentralized settlement system does not necessarily determine how authorities classify the underlying activity.

For Polymarket and similar platforms, that distinction could shape international expansion. Regulators are increasingly focusing on what users actually do, how markets are operated, and whether the platform benefits financially, rather than simply whether funds are held by a centralized intermediary. South Korea’s decision suggests that technical decentralization alone may provide limited protection from national gambling rules.

As we previously reported, Kalshi pulls ahead as Polymarket volume falls after World Cup.

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