Japanese exchange warns users over prediction markets

TLDR

Japanese crypto exchange Bitbank is warning that users who send funds to prediction markets like Polymarket risk full account suspension under Japans strict gambling laws.

1. Bitbank says deposits or withdrawals tied to prediction markets may trigger immediate freezes on logins, trading, and withdrawals for affected accounts.
2. The exchange cites Japanese gambling rules, treating event-based crypto betting as potential illegal gambling even when platforms are offshore.
3. This adds to global regulatory pressure on prediction markets and could prompt other Japanese platforms to adopt similar policies or push for clearer rules.

Deep Dive

1. What Bitbank Is Warning About

Bitbank has told customers it may suspend any account that sends or receives crypto linked to prediction market platforms such as Polymarket, with full freezes on login, deposits, withdrawals, and trading if flagged activity is detected. Reports indicate that some accounts tied to Polymarket have already been frozen, with the exchange stating it will not compensate users for losses caused by these measures. The warning is laid out in a company notice and echoed in coverage by outlets like Cointelegraph and CCN, which highlight that Bitbank is treating these transfers as a serious compliance risk rather than a minor violation.

2. Why Prediction Markets Are A Legal Flashpoint In Japan

Bitbank argues that accessing prediction markets from Japan to earn money on outcomes of elections, sports, or other events may be treated as gambling under Japanese law, which only permits tightly regulated activities like horse racing and lotteries. Coverage of Bitbanks policy notes that Japans Penal Code provisions on gambling can apply even when the website or protocol is operated abroad, and that regulators have not created a special category for on-chain event contracts. Platforms such as Polymarket already geoblock Japanese IPs and list Japan among restricted jurisdictions, but local use via workarounds still appears on regulators radar.

3. Global Pressure And What To Watch Next

Bitbanks stance lands as regulators in other countries step up scrutiny of prediction markets, including investigations and enforcement actions involving Polymarket and Kalshi. Analysts expect prediction market volumes to grow sharply, which makes legal classification more urgent for authorities. In Japan, key things to watch are whether other licensed exchanges mirror Bitbanks policy, whether the Financial Services Agency issues explicit guidance on prediction markets, and whether Polymarkets long-term expansion ambitions into Japan soften or harden in response.

Conclusion

Bitbanks warning shows how quickly account-level risk can emerge where local gambling law collides with global, crypto-settled prediction markets. Until Japan clarifies how it wants to treat these platforms, any on-chain betting activity that touches regulated Japanese exchanges carries a real possibility of frozen accounts and heightened legal exposure.