Polymarket in Ukraine: How Kyiv Protects the State from Crypto Prediction Platforms

The recent blocking of Polymarket in Ukraine has raised an important question about the limits of the legal power of the state in the digital economy. Throughout Ukraine, communication companies have been ordered to block access to the forecasting platform, which allows users to bet on the outcome of various events. The decision was part of a broader campaign against more than 200 gambling-related websites.

However, the situation indicates a deeper legal contradiction: Ukraine’s current legislative framework simply does not provide for the existence of Web3-based forecasting platforms. According to Dmytro Mykolaivskyi, Leading Legal Director of the Digital Economy Development Office under the Ministry of Digital Transformation, this creates a non-Western legal situation for all parties involved.

Why has Polymarket been targeted by regulators?

The decision to block was made by the National Commission of Ukraine for State Regulation of Electronic Communications (NCSSR) based on the recommendation of PlayCity, the state gambling regulator. The main reason: the platform did not have a gambling license.

But there was another factor that apparently accelerated the process. Polymarket placed bets related to the Russian-Ukrainian war in the amount of more than $270 million. This included markets that predicted the capture of territories and the course of hostilities.

“We cannot rule out that the presence of war-related rates attracted the attention of regulators and accelerated the decision to block,” Mykolaivskyi explained.

Deeper problem: lack of legal recognition

The problem goes far beyond Polymarket. Ukrainian legislation simply does not recognize the existence of such clearly defined categories as “forecasting markets”. As a result, any platform that allows you to bet using cryptocurrencies automatically falls under the category of a non-lucensual gambling operator.

“Ukrainian legislation does not contain such a thing as “forecasting markets”,” Mykolaivskyi confirmed.

The long-awaited “Virtual Assets” law could change the situation by allowing companies to legally work with cryptocurrencies. However, until this law is passed, platforms like Polymarket remain in the legal loophole.

“This means that there is currently no legal way for Web3 forecasting markets to function on the territory of Ukraine without changes in legislation,” the official said.

Other platforms are in danger

The picture is complicated by the fact that blocking is not limited to Polymarket. Other forecasting platforms, such as Kalshi and PredictIt, were not included in the first list of blocked sites, but remain in a vulnerable position.

By playing according to the current rules, PlayCity allows any citizen to file formal complaints against platforms suspected of violating gambling laws. This means that one distributor can provoke similar measures against other forecasting markets, even if they have so far remained out of sight.

Will users find a way out?

However, there is good news for supporters of crypto predictive platforms: blocking is aimed exclusively at platforms, not users. Mykolaivskyi clarified that there are no legal efforts in the state to prosecute persons who use VPNs to access such services or interact directly with smart contracts.

“I am not aware of any attempts by the state to prohibit its citizens from interacting with decentralized protocols,” he said, adding that he had seen no precedent for prosecuting users for bypassing blocking.

When can we expect changes?

Unfortunately, there was little hope for quick legislative changes. Mykolaivskyi stressed that any adjustments to the definition of gambling should be adopted by the Parliament of Ukraine, and “the likelihood of such a revision during the military conflict is extremely low.”

This leaves Web3 prediction markets in a long-term legal gap. While Kyiv is developing comprehensive regulations for the digital economy, platforms will remain blocked within the area of Ukraine, and users will be forced to find alternative access routes.