South Korean law enforcement officials have allegedly handed over 18 Polymarket participants to prosecutors as part of an unlawful betting inquiry targeting 27 individuals who jointly risked approximately 17.6 billion won, equivalent to $12.7 million.
Based on information provided by Asia Economy, records supplied by the National Police Agency to the office of Democratic Party representative Yoon Kun-young revealed that the Gangwon Provincial Police Agency had initiated inquiries into 26 individuals up to Tuesday, forwarding 18 of those cases to prosecutors. According to the article, the top single wager placed by an individual participant reached roughly 5.7 billion won, or $4.1 million.
Law enforcement tracked down the participants by inspecting transparent on-chain activity, as noted in the coverage. Polymarket allows participants to acquire and dispose of contracts linked to real-world happenings, functioning through a noncustodial, peer-to-peer framework featuring automated clearing. The platform does not keep a traditional database of participants tied to their legal identities, the article pointed out.
Officials stated that activity on Polymarket amounts to prohibited gambling under the Criminal Act of South Korea due to individuals wagering funds on events lacking predictable outcomes. Conversely, the participants maintained that Polymarket ought to be classified as a cryptocurrency-derivatives trading venue instead, the publication stated.
South Korea takes action against Polymarket
Back in June, Gangwon law enforcement initiated the nation’s inaugural illicit gambling investigation concerning domestic Polymarket participants following a directive from the National Police Agency. On August 18, South Korean regulators sought to restrict access to Polymarket after concluding that the forecasting platform created an unlawful wagering environment for local users.
The media and communications oversight board of the nation argued that the platform’s winner-take-all mechanics promoted speculative betting, pointing to Polymarket’s functions in managing markets, establishing trading guidelines, facilitating digital asset deposits and withdrawals along with clearing, and gathering trading commissions.
Related: CFTC, US soldier accused of illegal Polymarket bet spar over interpretation of prediction markets
Polymarket countered that it failed to offer localized Korean-language support or accept payments denominated in Korean won, asserting further that its noncustodial transactions and utilization of smart contracts meant it avoided direct custody of participant capital. The oversight committee dismissed this defense, noting that technical features do not grant immunity from South Korean legislation.
Tae-Lim Kim, a partner attorney at AXIS Law, mentioned to Asia Economy that the financial activities could satisfy the legal criteria for wagering. He noted that labeling them as predictive derivatives would prove challenging as a primary defense during criminal trials, though the capability to transfer contracts and close out positions prior to expiration could influence judicial evaluation.
Magazine: Revolut ID thefts highlight KYC’s dangers: Here’s how to fix it
Originally published at https://cointelegraph.com/news/south-korea-polymarket-users-prosecutors-gambling-probe?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound.
