Japanese crypto exchange Bitbank threatens account closure over prediction market use

A Japanese cryptocurrency exchange, Bitbank, has told its customers that it may suspend accounts found transferring funds to prediction market platforms.

The announcement represents a tightening of the noose as Japan becomes one of the newest countries on the growing list of those restricting prediction market platforms even as their operators continue to seek regulatory approval.

Bitbank’s announcement about prediction market platforms 

Bitbank, an exchange registered with Japan’s Kanto Local Finance Bureau as crypto exchange operator No. 00004, said in an official notice that using platforms like Polymarket from within Japan for financial gain could constitute a gambling offense under domestic law. 

Bitbank specifically named Polymarket in its announcement and referenced other “betting-natured” prediction market services operated by overseas firms.

Accounts that make deposits to or withdrawals from prediction market services will be flagged and lose their account login access, all their crypto deposits and withdrawals, Japanese yen withdrawals, and trading capabilities. 

The exchange stated that these measures are to follow the law and protect users from legal risks. It added that it bears no liability for damages resulting from these restrictions.

In Japan, gambling is mostly against the law, except for a few specific things like horse racing and lotteries. Prediction markets currently sit in a “gray zone” where the law is not fully clear.

Japan is currently listed among jurisdictions subject to frontend restrictions from Polymarket. Several other countries are blocked entirely or limited to close-only trading activity due to regulatory requirements.

What is South Korea doing about prediction platforms? 

South Korea’s communications regulator, the Korea Communications Standards Commission, is evaluating whether Polymarket qualifies as an illegal gambling service. If it is eventually classified as such, it would lead to ISP-level blocking across the country. 

Cryptopolitan previously reported that the country opened its first criminal investigation into domestic Polymarket users after heavy trading activity around the June 3 national election. The Gangwon Provincial Police Agency is examining whether the activity on the platform violated local gambling rules after receiving a referral from the national police headquarters. 

The Brazilian government has also made moves, banning 27 prediction platforms in April 2026, including Polymarket and Kalshi, after the National Monetary Council issued Resolution No. 5,298 and banned derivative contracts tied to non-economic events such as elections and sports outcomes. 

Spain followed in May by temporarily banning the platforms and ordering internet providers to block them.

France, Germany, Italy, India, Australia, Argentina, and Indonesia have all either restricted access to prediction market platforms or escalated enforcement operations against them. 

U.S. support for prediction market platforms remains strong 

Cryptopolitan reported that the Commodity Futures Trading Commission (CFTC) under Chairman Michael Selig recently proposed a framework for evaluating which event contracts serve the public interest and which violate federal law. 

Rather than imposing an outright ban, the CFTC introduced a three-step “balancing test” that would evaluate a contract’s hedging utility, price discovery value, and potential to encourage illegal activity. 

However, a coalition of 39 state officials argue that prediction markets function as unregulated gambling operations.

Supporters of prediction markets have pushed back against the gambling classification, stating that it misses what these platforms actually produce.