26 Domestic Users Arrested in PolyMarket Case with Cumulative Betting Amount of 17.6 Billion Won

Twenty-six domestic users who utilized the overseas cryptocurrency-based prediction market platform PolyMarket have been arrested by police, with their cumulative betting amount reaching approximately 17.6 billion won.

According to Asia Economic News on July 17, analysis of data submitted by the National Police Agency to Rep. Yun Geon-yeong's office revealed that the Gangwon Cyber Investigation Division arrested 26 PolyMarket users as of July 15, with 18 of them being referred to prosecutors.

The cumulative betting amount for these users on PolyMarket, calculated in Korean won, totaled approximately 1.76 billion won. The highest individual bet amounted to around 5.7 billion won.

PolyMarket is a cryptocurrency-based platform that allows users to predict outcomes of events in politics, society, and economics using an 'yes/no' format. Users receive either 1 USDC or 1 pUSD per week based on the prediction result, or lose their invested funds.

The platform operates as a non-custodial peer-to-peer (P2P) system without directly holding user assets, with automatic settlement. While PolyMarket does not manage users' real-name lists directly, police have used open-source intelligence (OSINT) techniques to analyze publicly available blockchain transaction data to identify and track domestic users.

Police view transactions on PolyMarket as illegal gambling, focusing on the structure where property gains or losses are determined based on unpredictable event outcomes with cryptocurrency at stake, rather than the name or form of the transaction. They believe this meets the criteria for violation of Article 246 of the Criminal Act regarding gambling offenses.

Earlier, the Broadcasting Media and Communications Commission (BMCC) voted to block domestic access to PolyMarket on June 18, citing that the platform's structure encourages speculation by wagering assets on uncertain event outcomes. PolyMarket argued it does not provide Korean language services or support won payments, operates as a non-custodial P2P system, and thus cannot be considered an illegal gambling establishment.

However, BMCC determined that technological structure or service methods alone do not exempt the platform from domestic legal application, concluding that by offering domestic-related issues for trading with uncertain outcomes determining user gains and losses, PolyMarket effectively provides an illegal gambling environment to domestic users.