South Korea orders a block on Polymarket over illegal gambling concerns

South Korea’s Media and Communications Commission has ordered access to Polymarket to be blocked, arguing that the blockchain-based prediction platform operates as an illegal gambling venue. For PSPs and other high-risk payment providers, the key point is simple: technical structure did not save Polymarket here, and the regulator treated the service as a licensed gambling activity regardless.

1. The commission said Polymarket, the American prediction market, is running gambling and distributing information that helps create new gambling venues, which is prohibited under South Korean law. It also argued that Polymarket’s “winner takes all” model, where users can win or lose money depending on event outcomes, encourages speculative gaming behavior.
2. As part of the basis for the block, the regulator pointed to “setting trading rules, providing systems for deposits and withdrawals in cryptocurrency, settlement, and charging transaction fees.” In its view, all of that requires a license, and Polymarket does not have one.
3. Polymarket pushed back by saying it had stopped offering Korean-language services, does not support payments in South Korean won, and operates through non-custodial transactions and smart contracts rather than directly controlling customer funds. The commission rejected that line of defense, saying decentralization, trading interfaces, and order books do not exempt the service from compliance with South Korean law.
4. The platform is already blocked in more than 35 countries, usually for lack of a gambling licence. In some markets, including Portugal, the reason was insider trading.
5. The decision lands as South Korea’s crypto platforms are under pressure. Dunamu, the parent company of Upbit, the country’s largest crypto exchange, said first-half revenue fell 49.1% year on year to 408.1 billion won ($289 million). Bithumb reported a similar slide: operating revenue down 48.7% in the first half, with a net loss of 108.7 billion won ($77 million) versus a net profit of 55 billion won ($39 million) a year earlier.

On the exchange side, total trading volume across South Korea’s five licensed exchanges — Upbit, Bithumb, Coinone, Korbit and Gopax — fell 49.5% year on year in the second quarter to $146.43 billion, according to CoinGecko. By comparison, total trading volume on the prediction platforms Polymarket, Polymarket US and Kalshi reached a record $50.6 billion in July, up 7.8% from June, while Polymarket alone saw July volume fall 26% to $7.9 billion.