Polymarket Weighs KYC Checks Amid Global Regulatory Pressure

Polymarket lets users trade cryptocurrency-based contracts tied to outcomes in politics, sports, economics and weather, with winning positions paying out after an event is resolved. South Korea generally prohibits gambling under its Criminal Act, which allows fines of up to 10 million won ($7,000). Regulators said the platform’s winner-take-all structure encourages speculation, while its non-custodial model and smart-contract settlement do not place it beyond Korean law.

The Korea Media and Communications Commission decided on Aug. 18, 2026, to order domestic internet service providers to block Polymarket, following a July 6 hearing at which the company argued it neither handles customer funds nor accepts won payments. The commission said it consulted the Korean National Police Agency, the National Gambling Control Commission and the Korea Sports Promotion Foundation before concluding the service could facilitate illegal gambling. South Korea joins more than 30 jurisdictions restricting access to the platform.

Polymarket and Kalshi let users trade event contracts tied to elections, sports and other outcomes, blurring the boundary between derivatives and gambling. The Commodity Futures Trading Commission says the Commodity Exchange Act gives it exclusive federal jurisdiction over contracts listed on registered exchanges. States counter that sports-heavy platforms are effectively unlicensed betting businesses subject to local gambling laws. The dispute carries fiscal stakes: the American Gaming Association estimates states have missed out on more than $1.2 billion in tax revenue since sports event contracts emerged.

On July 27, 2026, U.S. District Judge Katherine Menendez issued a preliminary injunction blocking Minnesota’s first-in-the-nation prediction-market ban before its scheduled Aug. 1 start. The law would have made operating, hosting or advertising covered markets a felony punishable by up to five years in prison and a $10,000 fine. Menendez found the CFTC, Polymarket and Kalshi were likely to prevail on federal pre-emption claims and faced irreparable harm, leaving the state law suspended while the litigation proceeds.

Polymarket is a prediction-market platform where users trade on the outcomes of political, economic and other events, with contract prices reflecting market-implied probabilities. The Korea Communications Standards Commission is considering restricting the service over concerns that it may constitute illegal gambling and encourage highly speculative activity. The case also raises questions about where prediction markets fall within the boundaries of financial-trading and gambling regulation.

As of July 20, 2026, the commission said it would hear Polymarket's representations before deciding whether to take corrective action. It has not announced a decision date, fines or any amount involved. Polymarket already faces varying degrees of access restrictions and regulatory scrutiny in countries including the United States, Britain and France.

Polymarket is a prediction market where users trade crypto assets based on event outcomes. Its election contracts have repeatedly raised questions over whether they constitute gambling because users can place wagers and profit from the results. The Korea Communications Standards Commission (KCSC) will assess whether the platform violates South Korea’s anti-gambling laws. Eight countries, including France and Germany, have already classified it as an illegal gambling platform.

The review was triggered by a Polymarket prediction market on South Korea’s June 3, 2025 presidential election. South Korean police have also reportedly begun investigating users suspected of gambling illegally through the platform. KCSC has formally launched its review but has not disclosed the value of the transactions involved. If it ultimately finds the platform illegal, it may order South Korean internet service providers to block it directly.