Polymarket: 26 punters identified by South Korean police

Twelve million dollars in bets, 26 suspects. South Korean police have formally opened cases against 26 Polymarket users for illegal gambling, and 18 of them have already been referred to the prosecution. The Asia Economy media puts the cumulative stakes at 17.6 billion won, or approximately $12.7 million.

The platform is however inaccessible from the country, blocked by decision of the communications regulator. But the investigators did not need any cooperation from Polymarket to trace the bettors: the positions obviously leave a public trace on the blockchain.

The police carried out what Korean law calls an “ipgeon” (입건), the formal opening of a criminal case against an identified person. The decision to prosecute then rests solely with the prosecutor.

Eighteen of the 26 cases have already reached the prosecution. The rest remains in the hands of investigators, who are continuing their checks on bets totaling 17.6 billion won.

A single bettor concentrates 5.7 billion won in stakes, approximately $4.1 million. It alone weighs almost a third of the volume targeted by the investigation.

To identify those involved, the police crossed public blockchain registers and OSINT, for open source intelligence, intelligence drawn from freely accessible sources: social networks, forums, announcements, public documents. Polymarket settles its contracts in USDC on Polygon, and each position is entered into a register that anyone can read.

Trading without identity verification (KYC, know your customer) protects the user as long as their address remains isolated from the rest of their financial activity. It is enough for the funds to pass through a Korean platform subject to the registered bank account for the wallet to attach itself to a civil identity.

The South Korean penal code punishes a simple player with a fine of up to 10 million won, approximately $7,000. The habitual gambler risks up to three years in prison or a 20 million won fine. The law also follows the Korean national across borders: a bet placed from abroad or on a foreign site falls under the same article.

The exceptions are public monopolies: state lotteries, Sports Toto sports betting, horse racing and cycling, plus a single casino open to nationals, in Kangwon Land. Everything else, from offshore bookmakers to prediction markets, falls into the category of illegal gambling.

The blocking of access to Polymarket was ordered a month before the first wave of accusations by the Korea Communications Standards Commission (KCSC), the body which decides on the filtering of sites deemed illicit. Domain filtering does not stand up to a VPN, and the investigation has moved from the site to the wallets of its users.

Polymarket bought the operator QCEX for $112 million in order to return to the American market under license from the CFTC (Commodity Futures Trading Commission), the federal regulator of derivatives. ICE, owner of the New York Stock Exchange, then committed up to $2 billion to the company, at a valuation of around $8 billion.

The same product is therefore traded under federal supervision in New York and is worth a fine in Seoul. However, Korea's appetite for digital assets is not weakening: local platforms have around 16 million accounts for 51 million inhabitants, and Upbit regularly competes with the world's leading exchanges in daily volume.