Taiwanese law enforcement is currently conducting an investigation into online influencers and community members who have been promoting a Polymarket contract related to Taiwan’s upcoming election. The authorities have issued subpoenas to several influencers and individuals within the crypto community, according to a report from Taiwan-based media outlet BlockTempo.
The Polymarket Contract and Prohibited Gambling
Polymarket is a platform that allows users to place bets on the outcome of the January election in Taiwan. Currently, there are over $300,000 wagered on various contracts, with the market giving the Democratic Progressive Party’s Lai Ching-te, also known as William Lai, a 78% chance of winning.
However, gambling on election outcomes is explicitly prohibited under Article 88-1 of Taiwan’s Presidential and Vice Presidential Election and Recall Act. This law states that individuals gambling on election or recall outcomes in public or public-accessible places can face fines, short-term detention, or imprisonment for up to six months.
“Law enforcement agencies in Taiwan are vigilant in investigating any gambling activities related to presidential elections,” said Sherman Lin, an attorney at Taipei-based Lin & Partners.
Jurisdictional Challenges and Legal Precedents
Gambling on election outcomes is also illegal in most U.S. states, but enforcement is primarily handled by the Commodity Futures Trading Commission (CFTC). Polymarket’s Terms of Use also prohibit U.S. persons from using the platform.
However, the jurisdictional challenges faced by overseas entities limit Taiwan’s legal reach primarily to domestic actors, making it difficult to take actions against platforms like Polymarket. According to Lin, law enforcement would likely focus on online influencers who promoted the contract since they can be targeted within Taiwan’s jurisdiction.
It is worth noting that despite existing legal precedents for going after centralized entities involved in election gambling, there is no established legal precedent in Taiwan for decentralized platforms organizing election betting.
“The decentralized nature of Polymarket and its lack of physical presence in Taiwan could limit the Taiwanese judicial system’s authority over the platform,” explained Lin.
Legal Implications of Promotional Activities
Recent cases involving Taiwanese prosecutors pursuing online influencers who promoted trading platforms demonstrate that even promotional activities can have legal implications. When the unlicensed crypto exchange JPEX collapsed in Hong Kong, local law enforcement arrested several online influencers who had promoted the platform.
Thus, it is crucial for online influencers to be aware of the potential legal consequences and the need to comply with regulations when promoting such platforms.
Increased Regulation and Oversight
In an effort to protect investors and increase regulation, Taiwan’s Financial Supervisory Commission (FSC) has established a Financial Technology Bureau to oversee cryptocurrencies. The FSC-managed Fintech Bureau will be responsible for enhancing regulation within the cryptocurrency market.
The FSC is also exploring the possibility of introducing cryptocurrency exchange-traded funds (ETFs) and has expressed interest in studying foreign cryptocurrency futures products and ETFs, with the intention of gradually easing restrictions in alignment with global market conditions.
