Bitbank Suspends Polymarket Users Before Japan Issues Formal Ban
What You Need to Know
- Bitbank suspended accounts sending funds to Polymarket, citing Japan’s gambling laws and regulatory ambiguity.
- Regulated crypto exchanges self-censor to avoid license revocation rather than await formal government enforcement guidance.
- Brazil, Spain, and South Korea have banned or restricted prediction market platforms since April 2026.
- Prediction market operators face shrinking addressable markets as jurisdictions implement restrictions despite global user traffic.
Bitbank, one of Japan’s oldest registered crypto exchanges, has told customers it will suspend accounts detected sending funds to prediction market platforms, specifically naming Polymarket in its notice. The move signals that even exchanges operating in regulatory gray zones are now enforcing conservative interpretations of domestic gambling law rather than waiting for formal guidance.
Japan has long prohibited most forms of gambling outside narrow carve-outs like horse racing and lotteries, and prediction markets currently sit in genuinely ambiguous territory under that framework. Bitbank’s decision to act unilaterally, before any formal ruling, follows a pattern seen repeatedly in crypto: regulated intermediaries self-censor ahead of enforcement because the downside of being wrong is account seizure or license revocation. The exchange was explicit that suspended accounts lose trading access, all crypto and yen withdrawal capabilities, and that Bitbank accepts no liability for resulting damages. This is less a policy announcement than a liability shield. The broader geography of restriction is expanding fast: Brazil banned 27 prediction platforms in April 2026 following a National Monetary Council resolution, Spain followed in May with ISP-level blocks, and South Korea is running a criminal investigation into domestic Polymarket users after election-related trading activity. For operators seeking licensing partnerships with established players, that list of restricted jurisdictions makes the addressable market look considerably smaller than the global traffic numbers suggest.
The countries still broadly permissive toward prediction markets are now fewer than the countries actively restricting them.
The CFTC under Chairman Michael Selig has proposed a three-step balancing test rather than an outright ban, which keeps the U.S. as the most commercially viable jurisdiction for platforms like Polymarket and Kalshi. That regulatory divergence between the U.S. and most of the rest of the world is sharpening, not narrowing, and it pushes prediction market volume further toward American users and infrastructure. For exchanges operating in multiple jurisdictions, Bitbank’s approach, preemptive restriction with explicit liability disclaimers, is likely the template others follow as their own regulators begin asking questions. The 39 state attorneys general pushing back against the CFTC’s permissive posture add domestic uncertainty even in the U.S., meaning no major market outside America currently offers genuine regulatory clarity.
South Korea’s Communications Standards Commission has not yet issued a final classification on Polymarket, and the Gangwon Provincial Police Agency investigation into election-period trading remains open. How those two proceedings resolve will matter: a formal illegal gambling designation in South Korea would trigger ISP blocking across one of the highest per-capita crypto-active populations in Asia, and would likely accelerate similar reviews in jurisdictions still evaluating their positions.
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