Japanese Crypto Exchange Bitbank Limits Polymarket-Related Fund Transfers

Japan's biggest crypto exchange, Bitbank, issued an advisory note cautioning users that transactions associated with prediction market websites like Polymarket may lead to account deactivations because of possible violation of gambling laws in the country. As per the announcement made by Bitbank on Monday, the firm reserves the right to limit any accounts that conduct transactions involving deposits and withdrawals associated with prediction markets. This is in light of the existing regulatory gray area regarding prediction markets in Japan, which could potentially obstruct Polymarket's plans to enter the nation.

Bitbank Cites Potential Gambling Law Concerns Around Prediction Markets

According to Bitbank, any users whose accounts were suspended would not have access to many services, including access to their accounts, transactions, and even cryptocurrency trading. The exchange added that “we will not be liable for any damages incurred by our customers as a result of the account suspension measures.” The statement encouraged the clients to be careful in using third-party services and refrain from any kind of criminal or litigation activities.

Bitbank did not mention any particular regulation or instruction from the government that led to the announcement. According to the firm, prediction market systems that enable users to speculate on elections, sporting games, and future events can be classified as gambling under the laws of Japan when used for making money. This Bitbank announcement comes at a time when prediction markets are being subjected to more stringent scrutiny across the world following actions by regulators against Polymarket and Kalshi.

Earlier this year, in March, a nationwide ban was ordered by the Argentine government on the crypto-based prediction platform Polymarket, citing concerns that it operates as an unregulated betting service, as per a report by the Buenos Aires Times. Regulators have claimed that the platform allows users to wager on real-world events without complying with local gambling laws or financial regulations. This move reflected growing scrutiny of prediction markets globally, as access to the platform across the country gets blocked. 

Polymarket is no stranger to regulatory scrutiny. In 2022, the platform was fined by the US Commodity Futures Trading Commission (CFTC) for running unregistered derivatives markets and was subsequently required to block American users. Similar restrictions are imposed in France, Belgium, Poland, Singapore, and Thailand.