South Korea has moved to block Polymarket, the crypto-based prediction market, after regulators concluded the platform creates an illegal gambling environment for domestic users. What happened - On Aug. 18, South Korea’s Broadcasting, Media and Communications Review Committee voted to issue a corrective request ordering access to Polymarket be blocked. The committee determined parts of the platform fall under prohibited activities in the National Sports Promotion Act and could facilitate gambling as defined in the Criminal Act. - The decision followed weeks of review and a July hearing in which Polymarket was given a chance to present its case. Why regulators acted - The committee examined how Polymarket creates markets, sets trading rules, processes crypto deposits/withdrawals, and settles trades. It also reviewed transaction fees and concluded the platform’s operator economically benefits from share trading. - Regulators focused on the market mechanics: users trade shares tied to outcomes—from politics and elections to sports and weather—and payouts can produce extreme, winner-takes-all gains or losses based on events users can’t control. The committee said that structure encourages speculative gambling behavior. - Officials noted that although trades occur between users, Polymarket manages market creation, trading rules and the infrastructure for deposits, withdrawals and settlements. That role, plus fee revenue, led regulators to treat the platform as facilitating gambling or operating a gambling venue. Polymarket’s defense and the regulator’s rebuttal - Polymarket argued it is non-custodial and peer-to-peer: trades execute via smart contracts, the platform does not hold or manage user funds, and it does not issue sports-betting tickets—so it should be outside Korea’s gambling laws. - The committee rejected that technical defense. It said decentralized technology, lack of a Korean-language service, or absence of KRW payment options do not exempt a service from Korean law if local users can still access and use it via crypto. - Regulators pointed to markets specifically relevant to Korea—such as a contract tied to rainfall in Seoul—as evidence the platform still serves domestic users despite Polymarket having removed a Korean-language interface and barred KRW payments. Enforcement context and prior probes - The Aug. 18 corrective request comes after a separate police investigation launched in late May into Polymarket users suspected of illegal gambling through election-related markets—the first known South Korean police probe directly into Polymarket activity. - Before issuing its recommendation, the review committee solicited input from the National Police Agency, the National Gambling Control Commission and the Korea Sports Promotion Foundation; all raised concerns that Polymarket’s operating structure could fall within gambling and gambling-venue rules. Global regulatory pressure - South Korea’s action is part of a wider international clampdown on Polymarket. India ordered blocks in May and had earlier issued advisories to ISPs and VPN providers; the Czech Republic ordered blocks in July. France blocked access beginning July 16, citing risks of big losses and bet manipulation. The article also notes blocking measures reported in Australia and Germany (August and September 2025 in prior reports), and previous restrictions in Argentina and Spain. - Regulators abroad have similarly flagged concerns about stablecoin payments, offshore betting flows and capital moving outside monitored financial channels. What this means - The committee concluded that Polymarket’s markets expose Korean users to speculative, winner-takes-all financial structures tied to uncertain events and that an access block is necessary to protect users. The corrective request instructs domestic internet providers to restrict access. - Polymarket maintains its non-custodial, smart-contract model distinguishes it from conventional gambling operators; South Korean authorities have said delivery method and technical architecture don’t negate the application of domestic law when services reach local users. Implication for the industry - The case highlights how regulators are interpreting decentralized and crypto-native prediction markets through existing gambling and sports-promotion laws. For prediction-market operators and users, it underscores increasing scrutiny and a patchwork of national approaches that can limit access even when services claim technical decentralization. Read more AI-generated news on: undefined/news