South Korea Files Criminal Cases Against 26 Polymarket Users Over $12.7M in Event-Linked Bets

South Korean police have opened criminal cases against 26 users of the on-chain prediction market Polymarket, citing about 17.6 billion won (roughly $12.7 million) in wagers tied to political, economic and social outcomes. Eighteen of the individuals have been referred to prosecutors, according to information disclosed on Sept. 17 via data from Democratic Party lawmaker Yoon Geonyoung's office. The investigation, led by the Gangwon Police Agency's Cyber Investigation Unit, had formally booked the 26 suspects as of Sept. 15, Asia Economy reported. Police said the largest single position by one user was about 5.7 billion won ($4.1 million). Authorities contend the activity constitutes illegal gambling under Article 246 of the Criminal Code. They point to Supreme Court precedent that treats a wager as gambling when money is staked on an outcome involving chance, even if skill is also involved. In police reasoning, labeling the trades as "investment" does not change the fact that virtual assets are being risked on results that cannot be known in advance. Polymarket does not custody user funds and settles automatically in USDC or pUSD based on real-world outcomes, meaning it does not maintain a real-name roster of traders. Investigators instead relied on public blockchain transaction records and open-source tracing methods to identify Korean users. The booked users are expected to argue the platform functions more like a virtual-asset derivatives market than gambling, a distinction likely to become central once the cases reach court. Attorney Kim Taerim of AXIS Law said the structure could still satisfy the legal definition of gambling, since gains and losses hinge on uncertain outcomes with virtual assets at stake. The cases follow South Korea's Aug. 18 move to block domestic access to Polymarket, after authorities said the platform's winner-takes-all design and betting on events outside users' control encouraged gambling. Polymarket had argued it was outside Korean jurisdiction after discontinuing Korean-language service and won-denominated payments, but regulators rejected that position. Polymarket has faced pushback in other jurisdictions as well. France, Australia and Germany have restricted access, and Baltimore sued Polymarket and rival Kalshi last month, alleging they operate as unlicensed sportsbooks.