Decentralized prediction platform Polymarket blocked in Singapore: What lessons for Web3 founders?
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Decentralized prediction platform Polymarket blocked in Singapore: What lessons for Web3 founders?
Encryption technology itself cannot provide a shield for circumventing the law.
Navigating Web3 tides with focused insightsAuthors: Iris, Liu Honglin
In early January, a user on X (formerly Twitter) revealed that Polymarket, a decentralized prediction platform that gained popularity during the U.S. election season, had been classified as a gambling site by Singaporean regulators and subsequently blocked.
The news quickly stirred waves across the Web3 industry.
Singapore has long been regarded as a crypto-friendly nation and considered a cryptocurrency haven in Asia, hosting countless projects. However, this action against Polymarket appears to contradict its previously welcoming stance. As a result, the perennial debate within the Web3 community has resurfaced: Can regulation and crypto innovation coexist?
Before answering that question, ManQin Law suggests first examining the core issue of this incident: Is this truly an incompatibility between crypto innovation and regulation, or did Polymarket itself cross a regulatory red line?
Polymarket: Crypto Innovation or Gambling Platform?
According to ManQin Law, the central conflict lies in defining exactly what Polymarket is.
Singaporean authorities labeled it a "gambling site" on the blocking page, leading to its restriction based on regulatory principles. However, some descriptions of Polymarket argue it merely offers binary options trading akin to traditional financial markets, emphasizing that while its mechanics resemble gambling, its primary purpose is public sentiment aggregation and display.
Regulatory bodies, however, do not classify platforms based solely on how users or the platform self-identify. Instead, they assess products based on their operational logic and underlying mechanics. Previously, ManQin lawyer Shao Shiwei published an article titled “Which Regulatory Issues Does Polymarket — the Crypto Prediction Market Platform Shared by Vitalik and Trump — Face?” offering an in-depth analysis of Polymarket.
The article points out that although Polymarket attempts to revitalize traditional prediction markets using cryptographic technology, its fundamental operation involves financializing event outcomes through binary options, allowing users to bet on whether an event will happen ("yes" or "no") and profit from price fluctuations. From a transactional standpoint, this mechanism for profiting from event outcomes goes beyond mere market forecasting—it exhibits strong speculative characteristics. Even if the platform claims its main goal is reflecting market consensus, the use of real money betting makes it difficult to escape classification as gambling.
While its mechanics fall under binary options, there are essential differences between crypto-based prediction markets like Polymarket and traditional financial binary options.
Traditional binary options typically revolve around defined financial assets—such as stocks, foreign exchange, or commodities—whose prices are influenced by publicly regulated markets. In contrast, on platforms like Polymarket, the "events" being traded are not recognized financial assets; instead, their outcomes are determined by factual verification at specific points in time (e.g., election results or disaster occurrences). Trading based on non-financial events makes such activities far more likely to be categorized as gambling rather than legitimate financial activity.
In Singapore, the Remote Gambling Act explicitly defines gambling as any activity involving wagers on event outcomes with monetary or other rewards. The operating model exemplified by Polymarket directly touches this legal red line.
Binary Options Must Still Comply With Regulation and Ethics
Even assuming arguendo that crypto prediction platforms qualify as binary options, that does not exempt them from regulatory oversight.
In fact, binary options are already subject to strict financial regulations in many jurisdictions. For example, the U.S. Commodity Futures Trading Commission (CFTC) permits institutions to offer binary options trading—but only if conducted on designated contract markets (DCMs) or swap execution facilities (SEFs), operated by regulated exchanges. This ensures market transparency and provides basic investor protections. Similarly, the Monetary Authority of Singapore (MAS) requires clear licensing for entities offering derivatives trading. All platforms engaging in derivative transactions must operate within the legal framework and undergo ongoing regulatory scrutiny. Clearly, crypto prediction platforms fail to meet these requirements, meaning their services lack fundamental legal protection and user rights may not be effectively safeguarded under judicial systems.
Moreover, Polymarket has recently faced ethical backlash due to the creation of a "California Wildfire Prediction Market," which drew widespread public criticism. Turning disasters into betting opportunities not only raises serious moral concerns but also risks causing broader societal harm. Some netizens pointed out that such markets could even incentivize extreme behaviors—such as deliberately triggering disasters to increase odds of winning bets.
Beyond wildfire predictions, Polymarket has previously sparked controversy over markets predicting extreme events like "whether a submersible would explode." While the platform defends itself by citing the "wisdom of crowds," its lack of ethical review over trade logic makes these predictions appear less like informed forecasts and more like cold-blooded speculation games.
More critically, these so-called "prediction markets" fail to clearly disclose information sources or outcome verification mechanisms. Who collects data on the progression of wildfires? How is fairness in adjudication ensured? This opacity fuels irrational speculation and gives further grounds for criticism of the platform’s conduct.
ManQin Law Conclusion
Against the backdrop of Singapore's longstanding support for blockchain technology and financial innovation, the move to block Polymarket is not simply a crackdown on the crypto industry. Rather, it represents a clear regulatory statement against activities violating legal norms. ManQin Law believes this sends an important signal: cryptographic technology itself cannot serve as a shield to bypass legal obligations. No matter how innovative a platform’s technology may be, if its underlying business model fundamentally crosses into gambling or other illegal activities, it cannot evade legal consequences—even when wrapped in the label of "blockchain."
This incident also highlights a crucial point: not every business leveraging blockchain technology qualifies as genuine crypto innovation. True crypto innovation must incorporate compliance with the legal and regulatory environment of its target market from the very beginning of business and product design, avoiding sensitive regulatory areas. Only within a framework that aligns with both technological logic and legal and ethical standards can sustainable development for the industry be achieved.
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