Ukraine's Ban on Polymarket: Legal Gaps and the Harsh Reality of Regulations

Ukrainian authorities announced regulatory measures in early 2026 to block access to the prediction market platform Polymarket. This measure, implemented alongside approximately 200 gambling-related websites, is driven by deeper legal challenges. It is not merely a temporary ban but highlights the fundamental issue that the legal framework enabling Web3 prediction markets in Ukraine is entirely absent.

Legal Framework Gaps for Web3 Prediction Markets

Dmitry Nikolayevsky, Chief Legal Officer of the Digital Economy Development Project Office at the Ukrainian Ministry of Digital Transformation, revealed the core regulatory challenges in an interview with CoinDesk.

“The concept of ‘prediction markets’ is not even included in Ukraine’s legal system,” Nikolayevsky stated. Prediction market platforms like Polymarket are considered unlicensed gambling operators under current Ukrainian law, with no legal pathway for approval.

He pointed out that for individuals and companies to legally operate businesses utilizing cryptocurrencies, the long-delayed “Virtual Assets Law” must be enacted. Until this law is established, Web3-related financial products remain in a gray zone or are outright illegal.

The Direct Trigger for the Block Command: War-Related Betting

The National Commission for State Electronic Communications (NKEK) instructed internet service providers to block access to Polymarket based on recommendations from the state gambling regulator PlayCity. The main grounds for the recommendation are that Polymarket does not hold a gambling license and that the platform hosts large-scale markets related to the Russia-Ukraine war.

According to local media AIN, bets related to the war on Polymarket have exceeded $270 million, including markets predicting territorial gains. Nikolayevsky also acknowledged, “The existence of war-related markets likely drew the attention of regulators and accelerated the blocking decision.”

Differences in Regulation Targeting Users and Platforms

Interestingly, the regulatory measures introduced by Ukrainian authorities are directed at the platforms themselves, and no direct legal actions have been taken against individual users at this time.

Nikolayevsky explained that there are no legal measures pursuing users who access Polymarket via VPNs or conduct transactions through smart contracts directly. He stated, “I am not aware of any attempts by the state to prohibit citizens from interacting with decentralized protocols,” and confirmed that there have been no cases of users being held responsible for circumventing the block.

This highlights the challenge of monitoring. While authorities can technically enforce access restrictions, tracking individual user transactions and prosecuting them legally is a different matter.

Other Prediction Markets Could Also Be Subject to Regulation

Other prediction market platforms like Kalshi and PredictIt are not currently on the initial blocklist. However, the legal uncertainty is common. Nikolayevsky pointed out that PlayCity is accepting formal complaints from citizens about platforms suspected of violating gambling laws. This means a single citizen’s report could lead to enforcement actions against other prediction markets that have so far gone unnoticed.

Legal Reforms Are Extremely Difficult to Achieve

The consensus among Ukrainian regulators and digital economic policymakers is that legislative changes in the near future are unlikely. Nikolayevsky stated that amendments to gambling definitions and Web3 market regulations “are especially unlikely during wartime.”

During wartime, urgent issues such as national defense, economic stabilization, and humanitarian aid take priority in parliament. Legislative discussions around Web3 prediction markets are likely to be postponed for the foreseeable future. In other words, in Ukraine, prediction markets including Polymarket currently have no viable legal pathway, and this situation is expected to persist at least in the medium term.

Ukraine’s case is part of a broader trend of increasing regulation of Polymarket in over 30 countries worldwide. Portugal recently added to the list of regulated countries, and efforts are intensifying globally. In Ukraine, the issue is not just about tightening regulations but exposing the structural problem caused by the complete absence of a legal framework.