Japanese cryptocurrency exchange Bitbank has issued a warning to customers, stating that accounts connected to prediction market platforms such as Polymarket could face restrictions or suspension.
The announcement highlights growing regulatory concerns surrounding crypto-based prediction markets, particularly in jurisdictions where such activities may fall under gambling laws. As regulators around the world increase their focus on these platforms, Japanese authorities appear to be taking a more cautious stance toward user participation.
Bitbank Tightens Compliance Measures
According to a notice published by Bitbank, customers who transfer funds to or from prediction market platforms may risk having their accounts restricted if the activity is deemed to violate Japanese regulations.
Prediction markets allow users to speculate on the outcomes of future events, including elections, sporting competitions, political developments, and other real-world scenarios using cryptocurrency. While many of these services operate outside Japan, Bitbank noted that participating in them for financial gain could potentially be interpreted as gambling under domestic law.
The exchange stated that users found engaging in transactions linked to prediction market services could face a range of restrictions, including:
- Suspension of account access
- Inability to deposit or withdraw cryptocurrencies
- Restrictions on Japanese yen withdrawals
- Loss of trading functionality
Bitbank also emphasized that it would not be liable for any losses resulting from such account restrictions. Users who believe their accounts were suspended by mistake can contact customer support and request a review.
Growing Global Pressure on Prediction Markets
The warning comes as prediction market platforms, particularly Polymarket, face increasing scrutiny from regulators and law enforcement agencies worldwide.
Earlier this year, Polymarket clarified reports suggesting it planned to introduce mandatory identity verification requirements. Company representatives stated that Know Your Customer (KYC) checks were limited to a separate beta product and would not become a requirement for existing users on its primary platform.
Despite this clarification, Polymarket continues to restrict access in several jurisdictions due to regulatory requirements. Japan remains among the regions where access limitations and compliance concerns persist.
South Korea Launches Investigation Into Polymarket Users
Regulatory pressure is not limited to Japan.
Authorities in South Korea have reportedly launched the country’s first known investigation involving Polymarket users. The Gangwon Provincial Police Agency is examining whether participation on the platform violated local gambling regulations.
Legal experts involved in the case have noted that while there is currently no clear domestic precedent regarding punishment for Polymarket users, authorities are actively assessing whether existing gambling laws apply to prediction market activity.
The investigation could become an important test case for how governments classify and regulate decentralized prediction platforms.
U.S. Authorities Also Increase Oversight
Prediction markets have also attracted attention in the United States.
Federal prosecutors are currently pursuing a case involving Army soldier Gannon Van Dyke, who allegedly used classified military information to place profitable wagers on Polymarket. Prosecutors claim he transformed approximately $33,000 into more than $410,000 through event-based trades linked to sensitive intelligence.
Separately, the Commodity Futures Trading Commission (CFTC) has repeatedly reminded market participants that anti-fraud, anti-manipulation, and insider trading regulations apply to prediction markets operating under U.S. jurisdiction.
These developments demonstrate that regulators increasingly view prediction markets as part of the broader financial ecosystem rather than a regulatory gray area.
Influencer Promotion Raises Additional Questions
Polymarket has also faced scrutiny over its marketing practices.
A recent investigation reported that the platform paid more than $350,000 to social media influencers over a 14-month period. According to the report, several promotional posts allegedly lacked proper disclosures indicating they were sponsored content.
The findings have added another layer of regulatory attention as authorities evaluate transparency and consumer protection issues within the rapidly growing prediction market sector.
What This Means for Crypto Users
Bitbank’s warning serves as a reminder that regulatory treatment of prediction markets remains uncertain in many countries.
While platforms like Polymarket continue to attract users with event-based trading opportunities, exchanges operating under strict regulatory frameworks are increasingly taking precautionary measures to reduce compliance risks.
For Japanese crypto users, participation in prediction markets could now carry consequences beyond market risk, including potential restrictions on access to exchange services.
As regulators in Japan, South Korea, the United States, and other regions continue reviewing the sector, prediction markets are likely to remain under close scrutiny throughout 2026.
