In a recent legal development in Taiwan, authorities have charged a man for using the crypto betting platform Polymarket to place bets on the country’s 2024 presidential elections, which concluded on June 13.
Legal Actions Against Election Betting
The Shilin District Prosecutor’s Office has targeted a man identified only by his surname, Chen, for his involvement in online betting related to the electoral outcomes. Chen is reported to have placed approximately 472 USD Coins (USDC) on the expectation that Ko Wen-je, the candidate from the Taiwan People’s Party, would win the presidency. Additionally, he wagered $60 on the Democratic Progressive Party winning a majority of legislative seats.
Under Taiwan’s President and Vice President Election Recall Act, it is illegal to gamble on election results using the internet. The investigation by the prosecutors concluded that Chen had violated this statute.
Upon admitting to the charges, Chen was granted deferred prosecution due to his lack of prior convictions. He agreed to defer prosecution for a year and to pay a fine of 30,000 yuan (approximately $4,000).
Prior to the elections, Taiwanese authorities had been scrutinizing the use of platforms like Polymarket for betting on political outcomes:
- Investigative Actions: In 2023, several individuals were summoned for their participation in such activities.
- Legal Ramifications: Those found guilty of betting on elections could face up to six months in prison, detention, or fines exceeding $3,000.
Platform Overview and Controversies
Polymarket has become a prominent name within the crypto gambling community, allowing users to place bets on a variety of topics, ranging from significant financial decisions to more trivial matters:
- Betting Topics: Users can bet on serious issues such as the outcomes of spot Bitcoin exchange-traded fund decisions, as well as lighter topics like social media activities of celebrities or environmental changes.
- Regulatory Challenges: In 2022, Polymarket faced regulatory scrutiny in the United States, resulting in a settlement with the Commodity Futures Trading Commission (CFTC) where it agreed to pay $1.4 million in fines and adjust its offerings to comply with CFTC and the Commodity Exchange Act regulations.
Despite facing regulatory challenges, Polymarket continues to attract significant investment, signaling confidence in its business model:
- Major Investments: On May 14, the platform received a $70 million investment led by Ethereum co-founder Vitalik Buterin and Peter Thiel’s Founders Fund, demonstrating strong investor confidence in its potential.
| Region | Legal Status of Election Betting | Notable Legal Actions | Consequences for Violations |
|---|---|---|---|
| Taiwan | Illegal | Charges against individuals | Fines, detention, or imprisonment |
| United States | Varied by state | Regulatory actions against platforms | Fines, operational adjustments |
The case of Mr. Chen highlights the legal and ethical considerations surrounding betting on political events, particularly within jurisdictions where such activities are strictly regulated. This incident serves as a crucial reminder of the complexities and risks associated with using digital platforms for betting on sensitive matters such as elections.
Featured image credit: DALL-E by ChatGPT