On May 25, 2026, Indonesian authorities blocked access to “Polymarket,” a blockchain-based prediction market platform. This action was based on the determination that the platform was “a disguised form of online gambling.”The authorities have stated that any platform that allows users to bet on uncertain outcomes—regardless of whether it utilizes crypto assets (a type of digital asset) or blockchain (distributed ledger technology)—constitutes a gambling product. This tightening of regulations is likely to reignite international debate regarding the legal status of prediction markets within the growing crypto assets market.Indonesia, home to one of the world’s largest Muslim populations, enforces strict regulations against gambling.This decision highlights the friction arising between technological innovation and existing legal frameworks. In particular, it is drawing attention as an example of how governments around the world are evaluating and regulating new financial services amid the expanding use of crypto assets. For working professionals in Japan interested in crypto, regulatory trends overseas will serve as an important source of information.Prediction markets are mechanisms that allow participants to predict the outcome of specific events and receive rewards based on those results. However, due to their nature, there is always a risk that they will be deemed gambling. Indonesia’s recent move can be seen as a concrete illustration of this risk. Notably, the authorities’ statement focuses on the “essence” of the service rather than its technical aspects.This suggests that characteristics of crypto assets, such as transparency and decentralization, do not necessarily serve as a regulatory get-out-of-jail-free card. Therefore, we must also consider the possibility that similar regulations will spread to other countries in the future. We will continue to closely monitor these developments and provide accurate information.
Indonesia’s Tighter Regulations: Background on the Polymarket Block
Indonesian authorities have blocked Polymarket, a blockchain-based prediction market, after determining that the platform constitutes online gambling.
Polymarket is a service that allows users to place bets on the outcomes of various events, such as political events and sports results. It uses crypto assets as collateral and automates transactions via smart contracts (programs that automatically execute contracts).
Authorities have emphasized that the use of crypto assets and blockchain technology does not alter the gambling nature of the service. Their view is that the act of betting money on uncertain outcomes is, by its very nature, gambling.
This regulation effectively instructs internet service providers in Indonesia to block access to Polymarket. As a result, using Polymarket from within the country has become virtually impossible.
Indonesia is strongly influenced by Islamic law and enforces strict regulations against gambling. This measure is seen as being based on the country’s legal and religious values.
What Are Prediction Markets? Their Mechanism and Key Issues
A prediction market is a market where participants predict the outcomes of future events and receive rewards based on those outcomes. Participants purchase tokens by “betting” on the probability of a specific event occurring.
For example, in a market predicting the outcome of an election, tokens are issued for predicting the winning candidate. If the prediction is correct, participants receive a reward; if incorrect, they lose their tokens.
On platforms like Polymarket, these transactions are recorded on the blockchain and settled automatically via smart contracts. This is said to enhance transparency and reliability.
However, because the mechanism has a strong “gambling” element, it may be subject to gambling regulations in many countries. In particular, the fact that it is aimed at financial returns tends to be viewed as problematic.
Some argue that prediction markets are useful tools for generating collective intelligence and improving the accuracy of future predictions. However, regulatory authorities tend to focus on their speculative aspects.
Crypto Assets and Regulation: Trends Around the World
As crypto assets become more widespread, countries around the world are exploring how to regulate them. Many nations have introduced regulations aimed at combating money laundering and protecting consumers.
For example, regulations such as KYC (Know Your Customer) and AML (Anti-Money Laundering) are widely mandated for crypto asset exchanges. These measures are intended to prevent fraudulent use.
On the other hand, the emergence of new technologies such as decentralized finance (DeFi) and NFTs (non-fungible tokens) is creating challenges that existing regulatory frameworks cannot fully address. Authorities in various countries are grappling with how to classify and regulate these new services.
The recent case in Indonesia demonstrates that even services utilizing crypto assets may be subject to strict enforcement if their nature is deemed to fall under existing regulatory scope. This means that technological innovation does not necessarily guarantee exemption from regulation.
Governments around the world are carefully weighing the value provided by crypto asset-related services against the risks they entail. This trend warrants continued close attention.
Implications for Japanese Readers
The recent tightening of regulations in Indonesia holds important implications for working professionals in Japan who are interested in crypto. Regulatory trends overseas may influence future regulations in Japan.
When using prediction markets or other crypto asset-related services, it is important to thoroughly verify the regulatory environment in the country where the service is provided. There is a risk that unexpected regulatory changes could restrict your use of these services.
The crypto assets market remains largely unregulated in many areas and is characterized by high legal uncertainty. You should always exercise caution when engaging with new services.
Furthermore, when making investment or usage decisions, you must always base your decisions on primary sources and do so at your own risk. You should exercise caution not to be swayed by unreliable information or speculative enticements.
Ren Kiryu will continue to provide the latest information on crypto assets, payments, and regulations from an accurate and cautious perspective. We hope this will assist you in gathering reliable information.
[Source: Original Article]
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