Bitbank Warns Users Over Polymarket, Cites Legal Risks

Japanese crypto exchange Bitbank has issued a stark warning to its users: accounts associated with prediction market platforms like Polymarket may face suspension due to potential conflicts with Japan’s gambling laws. The notice, published on June 15, underscores the increasing regulatory uncertainty surrounding crypto-based prediction markets in Japan.

Bitbank’s warning specifically targets transactions involving deposits or withdrawals linked to prediction services, suggesting that such activity could expose users to legal and regulatory risks. “Under Japanese law, participation in certain prediction market services may involve legal and regulatory risks for residents of Japan,” a Bitbank spokesperson told Cointelegraph. The exchange further cautioned that suspended accounts would lose access to core services, including trading, deposits, and withdrawals, with no liability on Bitbank’s part for resulting damages.

Regulatory Tensions and Polymarket’s Expansion Ambitions

The timing of Bitbank’s announcement coincides with Polymarket’s reported interest in entering the Japanese market, despite its current policy restricting access from Japan and 34 other jurisdictions. Polymarket, founded in 2020, operates as a blockchain-based prediction market where users trade binary event contracts, such as political outcomes or sports results. While the platform has seen exponential growth—including a valuation of $8 billion in late 2025 following a major investment by Intercontinental Exchange—its operations remain under scrutiny globally.

Japan’s gambling laws present a significant hurdle for Polymarket’s expansion. The country has yet to issue formal guidance on prediction markets, but Bitbank’s proactive stance suggests that crypto exchanges are treading cautiously to avoid regulatory backlash. Notably, other jurisdictions, including Spain and Brazil, have banned Polymarket outright in recent months, signaling heightened global scrutiny.

Prediction Markets Under Fire

Bitbank’s crackdown reflects a broader trend of increasing pressure on prediction markets worldwide. In the U.S., authorities have pursued insider trading cases involving Polymarket, including a high-profile indictment of a Google engineer in late May 2026. Meanwhile, regulators in Kentucky recently targeted prediction markets with a proposed 14.25% tax, further complicating the operating environment.

Despite these challenges, the sector has shown remarkable growth. Industry reports indicate that platforms like Polymarket and Kalshi processed over $40 billion in trading volume in 2025, highlighting strong user demand even amid regulatory hurdles. For Polymarket, the stakes are particularly high as it balances compliance with ambitions to expand in lucrative but legally complex markets like Japan.

What’s Next for Bitbank Users?

For Bitbank’s Japanese users, the warning raises immediate questions about how external platform interactions could jeopardize their accounts. The exchange advised caution, stressing the risks of engaging with services that might be classified as gambling under Japanese law. Users involved in Polymarket-linked transactions may need to reconsider their activities or seek clarity on regulatory boundaries to avoid disruptions.

With no specific government directive cited by Bitbank, the move appears to be a precautionary measure aimed at mitigating exposure to legal risks. However, the lack of formal guidance from Japanese regulators leaves both crypto exchanges and users in a gray zone, navigating compliance in an evolving legal environment.

As Polymarket eyes global expansion and prediction markets continue to grow, Japan’s stance on the industry will be closely watched. Regulatory clarity—or lack thereof—could have far-reaching implications for crypto exchanges and users alike.

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