South Korean police are going after individual users. Not the platform. The people who actually placed bets.
The Gangwon Provincial Police Agency launched a probe into domestic Polymarket users following wagers placed on the June 3 local elections. The National Police Agency asked Gangwon to lead the effort, and investigators are now tracing cryptocurrency transaction records to identify users across the country. Anyone caught could face fines of up to 10 million won — roughly $6,500 — under Article 246 of South Korea’s Criminal Act. That’s not a slap on the wrist for most people.
The scale of activity that triggered all this is pretty striking. Polymarket’s market on the 2026 Seoul mayoral election alone pulled in $52.2 million in total trading volume. That’s a lot of money moving through a platform that South Korean law basically treats as an illegal gambling operation.
Why South Korea Moved Against Users, Not Just the Platform
Most countries that have cracked down on prediction markets went after the platforms — ISP blocks, regulatory orders, licensing demands. South Korea seems to be taking a different angle, going after the demand side rather than just cutting off supply. It’s a harder approach to execute, since it requires linking crypto wallet activity to real identities, but it sends a sharper message to anyone still thinking about placing a bet.
South Korea isn’t exactly an outlier in terms of crypto engagement. It ranked 15th in the 2025 Global Crypto Adoption Index, so there’s a real user base here, and authorities clearly know it. The fact that investigators are digging through crypto transaction records suggests they have some confidence in their ability to trace wallets back to individuals — which is a pretty significant capability to put on display publicly.
Five other countries that rank among the top crypto adoption markets have also moved against prediction platforms. India and the United States are both on that list, though their approaches differ pretty sharply from South Korea’s.
Brazil, India, Spain — The Global Crackdown Spreads
Brazil’s National Monetary Council moved through Resolution No. 5,298, which blocked several platforms including Polymarket. The timing was awkward for Kalshi, another prediction market, which had just announced a partnership with a Brazilian brokerage firm right as the ban landed. The Brazilian government’s broader concern seems tied to consumer debt — officials don’t want unregulated betting markets pulling money out of households already under financial pressure.
India went a different route. Prediction markets there got classified as prohibited online money gaming, which triggered blocking orders against Polymarket. And it’s not stopping at the platform level — India’s Ministry of Electronics and Information Technology has been pushing VPN providers to cut off access too. That’s a more comprehensive enforcement posture than most countries have tried.
Spain ordered internet service providers to block both Polymarket and Kalshi. The country’s gambling watchdog, the DGOJ, has disciplinary proceedings underway that are expected to run for several months. Spain didn’t crack the top 20 in crypto adoption rankings, but its consumer protection rules give it enough legal reach to act regardless of how prediction markets get classified.
Indonesia blocked Polymarket after markets opened on whether President Prabowo Subianto might leave office before his term ended. Thailand classified the platform as illegal online gambling. The list keeps growing.
The US Situation Is Messier
America’s regulatory picture is kind of a tangle. Kalshi operates under a designated contract market license from the CFTC, which gives it federal legitimacy. But several states view its contracts — especially anything touching sports or elections — as gambling, full stop. That jurisdictional gap has produced litigation and a fragmented market where the rules change depending on which state you’re in.
On top of that, the US House Oversight Committee is investigating whether government officials traded on inside information through prediction market platforms. Kalshi flagged over 400 suspicious trades in early 2026, which probably didn’t help the industry’s image on Capitol Hill.
The federal-versus-state tension isn’t close to resolved. And the oversight probe adds another layer of scrutiny that platforms probably didn’t plan for when they were building out their election and politics markets.
What’s becoming clear across all these jurisdictions is that the categories driving the most volume — sports, politics, elections — are exactly the ones that regulators find most problematic. Stripping those out wouldn’t just trim the edges of these businesses. It would gut the core of what makes them popular. Platforms are basically caught between their most profitable products and an increasingly hostile regulatory environment in market after market.
Kalshi flagged over 400 suspicious trades in early 2026.
Frequently Asked Questions
What penalties do South Korean Polymarket users face?
Users identified in the investigation could face fines of up to 10 million won, equivalent to approximately $6,500, under Article 246 of South Korea’s Criminal Act.
How much trading volume did Polymarket’s Seoul election market generate?
Polymarket’s 2026 Seoul mayoral election market recorded $52.2 million in total trading volume, which drew the attention of South Korean authorities.
