Under current laws, there is no legal way for Web3 prediction markets to operate in Ukraine, according to a senior official involved in shaping the country’s digital economy policy.
In comments shared with CoinDesk days after Ukraine blocked access to Polymarket and nearly 200 gambling-related websites, Dmitry Nikolaievskyi, legal director of the Project Office for the Development of the Digital Economy of Ukraine at the Ministry of Digital Transformation, revealed a deadlock for Web3 prediction markets in the country.
Nikolaievskyi said that although the decision to ban Polymarket followed existing legal procedures, the underlying problem is that the country’s legal framework does not recognize prediction markets at all.
“Ukrainian legislation does not contain the concept of ‘prediction markets’,” Nikolaevsky said. He added that a long-delayed “virtual assets” law is needed so that businesses, not just individuals, can legally operate using crypto.
Until this law is passed, platforms that use cryptocurrency to facilitate betting on event outcomes, including Polymarket, are effectively unlicensed gambling operators in the eyes of the state.
“This effectively means that there is currently no legal way for Web3 prediction markets to operate in Ukraine until the legislation changes,” he said.
Polymarket, which allows users to bet on the outcome of events ranging from elections to geopolitical events, is currently restricted in more than 30 countries. Portugal is the latest in a growing list of countries to crack down on the phenomenon.
Previously, the Ukrainian National Commission for Regulation of Electronic Communications (NKEK) issued a directive requiring Internet service providers to block access to the prediction market.
Paris “linked to war”
The order followed a recommendation from PlayCity, Ukraine’s national gambling regulator, which cited Polymarket’s lack of a gaming license and the nature of its markets, which include betting related to the war between Russia and Ukraine.
Although Nikolaievskyi insisted that the ban was based on existing legal grounds and enforced through appropriate channels, he acknowledged that war-related markets could have prompted regulators to act more quickly.
“We cannot exclude the fact that the presence of ‘war-related’ betting on the platform may have accelerated the decision to block it, drawing the attention of the regulator to this subject,” he said.
Local media outlet AIN previously reported that more than $270 million in war-related bets had been placed on Polymarket, including markets predicting the capture of territories.
The situation leaves other prediction markets like Kalshi and PredictIt operating in a gray area.
Although they were not included in the initial list of blocked sites, Nikolaievskyi noted that PlayCity allows anyone to file a formal complaint against platforms suspected of violating gambling laws.
This means that a single citizen report could lead to similar enforcement actions against other prediction markets, even if they have remained unnoticed so far.
Maybe there’s still a way
However, the ban appears to be aimed directly at the platforms, not the users.
According to Nikolaievskyi, no legal efforts are currently underway to pursue individuals who interact with platforms like Polymarket using virtual private networks (VPNs) or interacting directly with smart contracts.
“I am not aware of any attempt by the state to prohibit its own citizens from interacting with decentralized protocols,” he said, nor has he seen examples of users being held responsible for circumventing blocks.
Legal changes are unlikely to be made soon. Nikolaievskyi said any revision to Ukraine’s definition of gambling would have to be passed by parliament and that “the likelihood of a revision is extremely low”, especially in times of war.
