Polymarket officially banned in South Korea after month-long dispute

The Korea Communications Standards Commission (KCSC) has moved to block access to Polymarket over a month after entering a dispute with the predictions platform over illegal gambling. At the start of July, South Korean regulatory bodies gave Polymarket the chance to respond to these allegations, allowing the US firm the chance to state its position before outright banning it. Polymarket did argue that its blockchain-based contracts should exempt it from traditional South Korean financial regulations. It pointed out that it has removed its Korean-language service from its platform and does not support payments in Korean Won. “Because the platform operates via non-custodial peer-to-peer (P2P) transactions and smart contracts, we do not act as an ‘organiser’,” the firm argued. “Furthermore, because we do not directly collect or manage funds, nor do we issue sports lottery tickets, we do not satisfy the legal requirements for violating the Criminal Act or the National Sports Promotion Act, nor do we meet the criteria for speculative/gambling activities.” However, South Korean authorities stated that the speculative nature of Polymarket’s offering, as well as its focus on specific South Korean markets, are enough to violate national laws. The KCSC responded: “The platform cannot evade the application of domestic laws simply by citing technical characteristics or service delivery methods – such as the presence or absence of a Korean-language service, decentralised technology, or centralised technologies (like trading interfaces and order books). “Because Polymarket targets South Korea-specific issues (such as ‘August Precipitation in Seoul’) and provides a practical illegal gambling environment to domestic users based on a winner-take-all profit/loss structure driven by chance, an access block is inevitable to protect domestic users.” Polymarket makes another enemy The move makes South Korea the latest in a long list of countries to restrict citizens’ access to the Polymarket platform. Polymarket’s resistance to class itself as a gambling operator has likely benefited its bottom lines in the US, given it is regulated by the Commodities Futures Trading Commission (CFTC), but it has largely hindered progress throughout the rest of the world. Asian countries including Indonesia, Singapore and Myanmar have all taken action against Polymarket, while in Europe, a plethora of major gambling hubs have restricted their users from trading on the platform. A lifeline in Europe for Polymarket and the rest of the predictions contingent may be found in Gibraltar, which has created a regulated prediction markets framework. But despite the rapid rise of the industry, Europe still seems to be creating major barriers to growth as its countries’ regulators stand firm on the opinion that predictions and gambling are one and the same – at least for now.