South Korea Launches First Formal Probe into Polymarket Users Over Gambling Allegations

South Korea’s Gangwon Provincial Police has opened a formal investigation into domestic users of Polymarket on allegations of illegal gambling. As Polymarket runs on the Ethereum blockchain, the probe highlights growing regulatory risk for decentralized prediction markets and could set a legal precedent for how DeFi platforms are treated in South Korea and beyond. While enforcement against fully decentralized protocols is complex, individual users remain vulnerable to prosecution, raising compliance and legal uncertainty for participants and operators. Market impact: heightened regulatory scrutiny may weigh on sentiment toward Ethereum-linked prediction and DeFi projects, potentially increasing volatility and selling pressure for ETH and related tokens until legal outcomes and regulatory guidance are clarified.