UK may lift prediction market ban; SoKor, Poland ‘crypto’ bill stall

This past week saw regulatory movement and quagmire in equal measure across the globe, as the United Kingdom’s financial watchdog considers lifting a ban on prediction markets, while South Korea and Poland both face legislative standoffs.

• U.K. weighs ending prediction markets ban
• South Korea’s digital currency bill faces delays
• Poland remains stuck over digital currency rules

UK considers lifting prediction markets ban

The U.K.’s top financial sector watchdog, the Financial Conduct Authority (FCA), has reportedly held talks with trading platforms about relaxing a ban on prediction markets that has been in place since 2019.

According to a September 4 report from The Times, the FCA is considering lifting its ban on prediction market platforms, such as the popular United States-based platforms Polymarket and Kalshi, for U.K.-based retail investors.

Prediction market platforms are a multibillion-dollar industry that allows users to profit from predictions on almost any event, from elections and political movements to the more traditional gambling sphere of sports.

In recent months, the sector has increasingly found itself at odds with gambling authorities and laws around the world, such as in South Korea and Indonesia, which both moved to block the platforms this year.

Likewise, in the U.K., because prediction markets offer binary options on event contracts, such as for sports, politics, and the weather, they fall under an April 2019 ban imposed by the FCA, which prohibited companies from “selling, marketing or distributing binary options to retail consumers.”

Despite such measures restricting them globally, prediction markets continue to raise funds at ever-higher valuations. Kalshi—whose valuation was just $2 billion in June 2025—reportedly began talks in July with venture capital group Sequoia Capital and asset managers Wellington Management on a funding round looking to raise $750 million at a valuation of $40 billion, despite the platform already raising $1 billion at a $22 billion valuation earlier in the year.

With U.S. platforms booming, The Times reported that “multiple stakeholders” within the industry have been seeking to end the U.K. ban by presenting the FCA with evidence of millions of consumers simply taking their business overseas, trading on foreign-based platforms, and using a virtual private network (VPN) to mask the real location of their phone or computer.

The firms in discussion with the regulator warned that this shift offshore leaves consumers more exposed to unregulated firms. One— they are largely ineffective. The concerning thing is that regulators who have an obligation to prevent consumer harm are by their actions effectively driving consumers to operators with no regulatory standards at all.”

The FCA is understood to be reviewing the regulations for speculative investments but declined to comment on the story or confirm its plans with regards prediction markets. 

The finance watchdog is likely busy preparing its digital asset regulatory framework, which was finalized in July of this year and is due to come into force next year. Digital asset firms operating in the U.K. will soon be able to apply for authorization—between September 30, 2026, and February 28, 2027—so they are ready to start or continue to trade under the new mandatory regime, which will come into force on October 25, 2027.

The U.K. regime has been a long time in the making, but other jurisdictions are even further behind in their digital asset regulation, not least South Korea, which has recently seen its legislative effort stall amid ongoing disagreement among lawmakers over the proposed approach.

South Korea digital asset bill stalls

The South Korean government has been holding talks with the National Assembly for weeks to advance the much-anticipated Digital Asset Basic Act, which would provide a regulatory framework for digital assets in the country.

However, according to a September 8 report from local outlet The Chosun Daily, discussions are struggling amid disagreements over a supervisory framework for stablecoins and limits on major shareholders’ equity in digital currency exchanges.

The country’s top finance regulator, Financial Services Commission (FSC), plans to submit the government’s proposal to the National Assembly this month, but until the sticking points are resolved, the timing of the bill remains uncertain.

The Digital Asset Basic Act was introduced to South Korea’s National Assembly by ruling Democratic Party lawmaker Min Byung-deok in June 2025. It would create a legal category for digital assets, establish a licensing regime for digital asset service providers, set issuance/disclosure rules, ban unfair trading, and separately regulate won-pegged stablecoins, including requirements for 100%+ reserve backing and bank custody.

Unfortunately, the bill has faced repeated delays and was pushed off the National Policy Committee’s agenda in May 2026, ahead of the June 3 local elections, with consultations among the government, parties, and regulators continuing into April 2026.

The Ministry of Economy and Finance announced in July 2026 that it would push for passage in the second half of the year, tying it to related efforts such as BTC spot ETFs and a separate “National Asset Basic Act,” which formally classifies government-held cryptocurrencies as official state property, establishing clear legal standards for how public agencies manage, value, and dispose of digital assets.

Part of the holdup to the digital asset bill has been an ongoing turf war between the FSC and the Bank of Korea (BoK)—the country’s central bank—over who will control stablecoin oversight and reserves; the former favoring broader stablecoin issuance rights, the latter wanting issuance restricted to bank-led consortiums with 51%+ ownership.

With discussions reportedly having primarily focused on who will issue stablecoins and what level of reserve assets and prudential requirements to impose on issuers, some lawmakers are concerned that there has been relatively little discussion of measures to monitor and control the risk that stablecoins could be exploited for money laundering or illegal transactions at the distribution stage.

The Chosun Daily report cited a National Policy Committee official who said, “Authorization of issuance and management of reserve assets are not enough. The key is how specifically the bill will lay out a supervisory framework that can detect unusual transactions and block money laundering during the distribution and transfer process after issuance.”

In the meantime, South Korea’s digital asset sector remains in regulatory limbo. Currently, it operates under the Virtual Asset User Protection Act—which handles unfair trading practices and came into effect in July 2024—plus the existing reporting regime, under which exchanges must register, use real-name bank accounts, follow AML/travel-rule requirements, segregate customer assets, hold reserves, and report unfair trading (market manipulation, wash trading)—all enforced while the broader Digital Asset Basic Act remains pending.

Yet, despite the delays, there is strong momentum around the bill, with South Korea being among the world’s fastest-growing digital asset markets, with inflows into blockchain-based crypto-assets of over $300 billion between June 2024 and June 2025 alone, based on data from the Organization for Economic Co-operation and Development (OECD).

South Korea can also take solace in not being the only jurisdiction struggling to find consensus on digital asset legislation. Poland is experiencing an arguably more entrenched stalemate, with the President having vetoed a crucial bill three times that would bring the country into line with its European Union peers.

As of September 4, Poland remains the only one of the EU’s 27 member states without a functioning national framework for implementing the bloc’s Markets in Crypto-Assets (MiCA) Regulation, after the country’s lower house of the parliament, the Sejm, failed to override President Karol Nawrocki’s latest veto of the bill.

The vote is the third such attempt to overturn Nawrocki veto, which itself is the third time he’s vetoed the legislation. It fell 25 votes short of the three-fifths majority (266 votes) required to override the veto, with 241 voting to override the veto and 198 opposed to the motion.

Justifying his most recent veto, Nawrocki argued that lawmakers had addressed only one of sixteen changes his office proposed, saying, “I will not sign a bad law just because it was passed again by the parliamentary majority – a bad law passed a hundred times is still a bad law.”

As with much debate around digital asset regulation, the impasse revolves around the delicate balance between consumer protection and support for innovation—something the MiCA framework itself largely managed to strike.

The European Union officially passed and adopted the MiCA regulation in April 2023, with framework coming fully into effect in December 2025 and enforced across all member states following the end of the final transitional grace period on July 1, 2026. Every EU nation was required to pass legislation to transpose MiCA into national law, and thus far, all have done so—except Poland.

Poland first introduced legislation to operationalize MiCA in February 2024, when the Ministry of Finance, under Finance Minister Andrzej Domański, published a draft Crypto-Assets Act dated February 22 and opened it for consultation. A substantially revised government bill was subsequently submitted to the Sejm on June 26, 2025, as “Bill No. 1424”, again under Minister Domański. Parliament passed the bill in September 2025, but President Nawrocki vetoed it on December 1, 2025, on the basis that it posed “a real threat to the freedoms of Poles and the stability of the state.”

On February 12, Nawrocki vetoed another attempt, “Bill No. 2064”, that would have aligned Poland’s digital asset rules with MiCA, including mandating a National Competent Authority (NCA) in the form of the Polish Financial Supervision Authority (KNF).

This second veto ignored a February 10 warning by the KNF that Poland had still not designated a competent authority to supervise the digital asset market, despite the impending MiCA deadline this summer.

Part of the President’s reasoning for this second veto was that Bill 2064 was “practically identical” to the original.

“I once again vetoed the cryptocurrency market bill. For the second time, I received a bill practically identical to the one I had previously vetoed. One detail was changed, and fundamental errors were not addressed,” said Nawrocki.

Critics of both versions of the legislation argued that they imposed too stringent licensing rules, high compliance costs, and criminal-liability provisions for service-provider executives, as well as posing the risk of stifling innovation and creating an “uncompetitive business environment.”

When announcing his veto of the second bill, Nawrocki argued that “if the government truly wanted the President’s signature, the previously raised objections should have been taken into account. This was not the case.”

Other than being frustrating for lawmakers and embarrassing for the country, the consequences of the ongoing stalemate—underscored by the Sejm’s failed attempt to overturn the President’s latest veto—are potentially substantial.

Poland cannot opt out of MiCA simply by not passing its implementing Act; MiCA applies directly in Poland regardless of whether the country passes implementing legislation. Yet, without national legislation, Poland lacks a fully operational framework for designating an NCA and therefore cannot comply with EU crypto-asset licensing, supervision, enforcement, and sanctions.

In addition, existing registrations under Poland’s former virtual-currency regime do not replace MiCA authorization, and local and foreign businesses cannot rely on them after the MiCA transitional period ended on July 1, 2026. This creates uncertainty for crypto-asset service providers, limits access to MiCA’s passporting rule, and may encourage local businesses to leave the country.

Beyond these potential economic impacts, the country may also face EU infringement proceedings for failing to fulfill its obligations to implement the necessary national framework.

If Poland is to avoid this outcome, lawmakers and the President will have to work harder on finding a compromise, or someone will have to change their red lines.

Source: coingeek.com