South Korean police opened the country’s first illegal gambling investigation into domestic Polymarket users who wagered on elections, marking a shift from platform blocking to user-level enforcement in high-crypto-adoption jurisdictions.
The Gangwon Provincial Police Agency and National Police Agency began tracing cryptocurrency transaction records on June 5, two days after South Korea’s local election on June 3. Police are issuing fines up to 10 million won (approximately $6,500) under Article 246 of the Criminal Act to identified users.
The Seoul mayoral election market alone generated $52.2 million in resolved volume on Polymarket, underscoring the platform’s reach in the country. South Korea ranks 15th in Chainalysis’ 2025 Global Crypto Adoption Index, placing it among the world’s most active crypto markets. Yet six of the top 20 crypto adoption markets, including South Korea, have now moved against prediction platforms through gambling law, derivatives restrictions, ISP blocks, user enforcement, or combinations thereof.
South Korea’s enforcement action reflects a broader regulatory pattern. In May 2026, Spain ordered internet service providers to block Polymarket and Kalshi, with gambling watchdog DGOJ expected to complete disciplinary proceedings within three to four months. Brazil’s National Monetary Council blocked 27 platforms in April 2026 under Resolution No. 5,298. India’s Ministry of Electronics and Information Technology sent a letter to VPN providers in April warning against enabling access to blocked platforms after India’s Promotion and Regulation of Online Gaming Act 2025 came into force on May 1.
Brazil Finance Minister Dario Durigan framed the blockade as consumer protection. “The government wanted to prevent an unregulated betting market from embedding itself in household finances at a moment when Brazil was already working to reduce consumer debt,” Durigan said.
The enforcement escalation comes as prediction market volumes surge. Polymarket International recorded $9 billion in trading volume in April 2026, while combined monthly trading on Kalshi and Polymarket reached $10 billion in May 2026, up from under $5 billion in September 2025. Sports, politics, and crypto drove 91% of Kalshi’s global volume and 90% of Polymarket’s volume since July 2024, with sports accounting for 80% of Kalshi volume and politics representing 32% of Polymarket’s volume.
Kalshi flagged over 400 suspicious trades since the start of 2026, more than double its total for all of 2025, suggesting platforms are detecting and reporting market manipulation even as regulators tighten restrictions.
In the United States, the House Oversight Committee opened a probe into Kalshi and Polymarket in May 2026. Polymarket relaunched a US exchange in late 2025 after acquiring a regulated derivatives firm, positioning itself as a compliant operator. Kalshi announced a Brazilian distribution partnership with brokerage XP International in March 2026, though that market subsequently closed to the platforms.
The divergence between crypto adoption and regulatory permission has created enforcement challenges. User-level prosecution in South Korea signals that jurisdictions with mature crypto infrastructure are now targeting individual participants rather than waiting for platforms to self-regulate or relocate. This approach bypasses platform compliance mechanisms and directly penalizes retail participation, potentially fragmenting prediction market access along national lines.
