USDSouth Korea Blocks Polymarket as Major Crypto Exchanges Report Sharp Earnings Declines
Exchange revenue falls while regulators expand gambling enforcement
TL;DR
- South Korea blocked domestic access to Polymarket after regulators concluded its prediction markets constitute illegal gambling.
- Bithumb and Upbit parent Dunamu each reported roughly 49% year-over-year revenue declines during the first half of 2026.
- Regulators rejected Polymarket’s argument that its peer-to-peer, non-custodial structure placed it outside domestic gambling rules.
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South Korea blocked domestic access to Polymarket as regulators classified its prediction-market activity as illegal gambling, while Bithumb and Upbit parent Dunamu separately reported steep first-half earnings declines tied to weaker liquidity and investor sentiment across the global digital-asset market. The developments were reported on Aug. 18, 2026, combining growing regulatory pressure on crypto-based prediction markets with deteriorating financial performance at two major South Korean crypto exchanges.
Bithumb’s operating revenue fell sharply from the comparable period a year earlier, while operating profit declined even faster and the exchange recorded a net loss. Dunamu reported a similar contraction in revenue and profitability. Dunamu attributed its performance to weaker conditions across the global digital-asset market rather than identifying a company-specific cause.
The reported figures translate into a decline of 160.4 billion won in Bithumb’s operating revenue and a 75.2 billion won reduction in operating profit from the prior-year period. Dunamu’s operating revenue fell by 393.8 billion won, while its operating profit declined by 437.6 billion won. Based on the reported first-half figures, Dunamu generated about 2.4 times Bithumb’s operating revenue and roughly 7.5 times its operating profit.
Dunamu said the downturn reflected conditions across the broader market. “The recent decline in performance is attributed to a contraction in liquidity across the global digital asset market, which has led to a weakening of investor sentiment.”
Regulators reject Polymarket’s peer-to-peer defense
South Korean authorities separately ordered Polymarket blocked after determining that the platform facilitates gambling and the operation of gambling venues under the Criminal Act, along with comparable activity covered by the National Sports Promotion Act. The regulatory action followed a review that began in July after requests from the National Police Agency and the National Gambling Control Commission.
Police had also opened a separate investigation into local Polymarket users over suspected illegal gambling. The commission concluded that Polymarket’s yes-or-no contracts encourage speculative behavior because users’ gains and losses depend on events beyond their control.
Polymarket allows users to trade contracts based on whether real-world events occur, including elections, sports results, economic data and weather. Polymarket said it had removed Korean-language services, does not support payments in South Korean won and uses non-custodial peer-to-peer transactions and smart contracts.
Regulators rejected those arguments. The commission determined that Polymarket’s operator still manages market creation and trading rules while providing crypto deposit, withdrawal and settlement systems and charging fees. The decision treated the platform’s operating structure and economic activity as subject to domestic law despite its use of smart contracts and non-custodial transactions.
The commission said: “Technical features or service methods cannot exempt a platform from domestic legal compliance. Since Polymarket provides a real illegal gambling environment to domestic users, access blocking is unavoidable to protect them.”
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South Korea joins broader restrictions on Polymarket
South Korea became one of more than 30 jurisdictions that have restricted Polymarket over gambling concerns. France had ordered internet service providers to block access to the platform, while Spain, Indonesia, Argentina and Ukraine were also identified among jurisdictions imposing restrictions.
Dmitry Nikolaievskyi, chief legal officer at the Project Office for the Development of Ukraine's Digital Economy at the Ministry of Digital Transformation, said there “isn’t a legal way for it to return” in Ukraine.
Polymarket listed 39 countries as fully restricted from accessing the platform when the information was released. South Korea had not yet appeared on that list despite the domestic blocking decision.
Polymarket did not immediately provide further comment after the South Korean action beyond its arguments concerning Korean-language services, won payments, non-custodial peer-to-peer transactions and smart contracts.
This article has been refined and enhanced by ChatGPT.
