The Ukrainian regulatory landscape for decentralized finance (DeFi) experienced a significant shift recently after the National Commission for Regulation of Gambling and Lotteries (KRAIL) officially moved to block access to the popular prediction market platform, Polymarket. KRAIL has added Polymarket to its registry of illegal betting websites, effectively instructing local internet service providers (ISPs) to restrict access for Ukrainian citizens.
The key rationale behind KRAIL’s decision is the classification of prediction markets as unregistered and unauthorized gambling operations. While proponents of platforms like Polymarket argue that they are decentralized information aggregation tools or financial derivatives, Ukrainian authorities view the trading of event-based outcomes for profit as a form of wagering, thus falling under existing stringent gambling regulations.
This enforcement action highlights the growing tension between sovereign regulatory bodies and borderless decentralized applications. Ukraine, which possesses comprehensive legislation governing licensed gambling and lotteries, is signaling a commitment to enforcing consumer protection laws and tax compliance. By placing Polymarket in the same category as traditional illegal online casinos, the government is prioritizing regulatory oversight over the decentralized nature of the platform. The move serves as a warning to other decentralized autonomous organizations (DAOs) and Web3 applications operating within grey areas of existing Ukrainian law.
Source: Ukraine blocks Polymarket, classifies prediction markets as gambling
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