On August 18, South Korea's Communications Standards Commission (KCSC) officially approved blocking access to the decentralized prediction platform Polymarket. The decision was made after a thorough review, during which the regulator classified the service as an illegal gambling environment.
The Essence of the Regulator's Claims
The KCSC's main claims concern markets related to political events, payments, sports matches, elections, and weather conditions. According to the commission, these markets operate on a "winner takes all" model, which directly encourages users to engage in gambling behavior. The key argument is that the financial outcome of such bets depends on events that participants cannot control.
The regulator paid particular attention to Polymarket's operator role. The platform's administration, as noted in the decision, effectively manages the creation of markets and trading rules, facilitates the deposit and withdrawal of digital assets, and also conducts settlements and collects commissions from each transaction. According to the KCSC, this makes the platform a full-fledged gambling organizer, regardless of its technical architecture.
Polymarket's Arguments and the Authorities' Position
In response to the claims, Polymarket representatives stated that the service operates as a non-custodial P2P platform based on smart contracts and does not directly store user funds. However, the regulator countered: technical features, including decentralized elements and the trading interface, do not exempt the platform from South Korean laws. The KCSC emphasized that the block is necessary to protect local users from potential financial risks.
Notably, this is not the first case of pressure on prediction markets. Earlier in August, New York authorities initiated a review of marketing practices by operators of major platforms, including Polymarket and Kalshi, as well as related products from Coinbase and Gemini Titan.
My view: the South Korean regulator's decision is a signal for the entire industry. Decentralization is not immunity from national jurisdictions, and prediction platforms will have to adapt to local laws or accept the loss of entire markets. The question is whether other Asian regulators will follow the KCSC's example, which could significantly change the global map of accessibility for such services.