South Korea Restricts Polymarket Access Over Crypto Gambling Concerns

South Korea has blocked domestic access to Polymarket, a prediction market platform, citing violations of the country’s Criminal and National Sports Promotion Acts. This regulatory action aligns South Korea with over 30 other jurisdictions that have restricted Polymarket due to concerns regarding crypto-based gambling activities.

Key Takeaways

• South Korea has blocked local access to Polymarket, citing violations of national gambling laws.
• Regulators rejected Polymarket's defense of its peer-to-peer nature, asserting it manages market rules and facilitates crypto-based gambling activity.
• This decision places South Korea among over 30 jurisdictions, including France and Spain, that have restricted the platform.

Technical Context

Polymarket operates as a prediction market, enabling users to trade yes-or-no contracts based on the outcomes of real-world events. The platform utilizes non-custodial peer-to-peer transactions and smart contracts to facilitate crypto deposits, withdrawals, and settlements, a model often seen in Dapp crypto casinos. Regulators noted that while Polymarket claimed a P2P nature, its operator manages market creation, trading rules, and charges fees.

Compliance and Regulatory Context

The Korea Media and Communications Standards Commission approved the block after determining that Polymarket facilitates gambling and the operation of gambling venues under the Criminal Act and the National Sports Promotion Act. The commission rejected Polymarket's argument regarding its peer-to-peer structure, stating that the platform's operator still manages market rules and provides crypto-based financial systems. This review by the commission began following requests from the National Police Agency and the National Gambling Control Commission, with police also initiating investigations into local Polymarket users for suspected illegal gambling.

Market Implications

South Korea's decision contributes to a growing international trend of restricting Polymarket’s access. Jurisdictions such as France, in Spain, Indonesia, Argentina, and Ukraine have also implemented similar restrictions. France previously ordered internet service providers to block access to the platform, while Ukraine has indicated there is no legal pathway for its return. Polymarket currently lists 39 countries as fully restricted from accessing its platform.

Sources: South Korea joins more than 30 jurisdictions restricting Polymarket access