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Recently,http://Gate.io officially announced that it has becomethe first crypto exchange to integrate Polymarket, and has promoted experiences such as "no VPN required in mainland China" and "one-click participation in prediction markets" as communication highlights.
From the perspective of product design and traffic conversion, this may be a typical Web3 user growth move; however, viewed from the perspective of criminal justice and regulation in mainland China, this combination of "prediction markets + stablecoin settlement + accessible within mainland China" is no longer merely an "innovation narrative," but a highly sensitive structure that may simultaneously trigger gambling-related crimes, aiding-type crimes and other derivative regulatory risks.
Why Polymarket has highly "gambling-like" characteristics in the judicial context of mainland China
Polymarket's core business ispolitical elections, sports events, social eventsUsers place "bets" on outcomes such as these, buying shares in "yes/no" outcomes and receiving odds-based returns once the event is settled — in its "betting on event outcomes — odds-based settlement — platform commission" core mechanism, this trading structure is highly similar to traditional gambling:
- the subject of trading is not a genuine financial asset, but a probability wager on event outcomes;
- the source of profit is not value creation, but the losses of other participants, which conforms to the gambling characteristics of "aleatory nature" and "zero-sum game";
- the platform profits by taking commissions through trading fees, spreads and similar means. If one proceeds from the "substance over form" review logic commonly applied by mainland case-handling authorities, arrangements under which a platform profits through fees, spreads or traffic conversion carry a relatively high risk of being understood as "organizing, matching and facilitating gambling by others through network technology while profiting therefrom."
It is worth noting thatoverseas regulatory characterizations of Polymarket are themselves not uniform: in some contexts it is regarded as an "event contract" or a financial-derivative-like product; in other jurisdictions it may be brought within a gambling regulatory framework.
For mainland China, however, what truly matters is not which label it is given overseas,but whether, in the local judicial context, it exhibits the structural features of "taking uncertain event outcomes as the subject matter, using invested funds to seek odds-based returns, and the platform profiting by taking a commission therefrom."On this point, the risk of its being understood as a gambling-type business is significantly higher than the possibility of its being tolerated as an ordinary financial innovation.
(Polymarket page display, for legal education purposes only)
Why is "no VPN needed in mainland China" not a simple product optimization, but a risk amplifier?
If the business structure itself already sits in a highly sensitive zone, then the most alarming aspect of this promotion is not the phrase "prediction market," but rather—"no VPN needed in mainland China"。
From the perspective of mainland criminal law and regulatory authorities, this statement is likely not a product highlight, but a risk amplifier.
1. It nullifies the "offshore conduct" defense:Traditional crypto platforms require a VPN to be accessed within mainland China, and lawyers acting as defense counsel can (even if somewhat strainedly) argue that "the service is directed offshore and does not provide services to mainland residents"; whereas Gate's promotion that technical means enable unobstructed access and direct betting within mainland China amounts to proactively extending its services into mainland China, triggering the territorial jurisdiction requirements of the Criminal Law.
2. It establishes subjective intent for regulators to deem the platform as "targeting mainland users":The promotional language of "no VPN needed" is in essence a deliberate attempt to attract mainland users to participate, which is sufficient to prove that the platform has the direct intent to "provide gambling services to Chinese citizens," and in judicial practice this will be characterized as "knowingly providing technical support/fund settlement for others' gambling."
3. Stablecoin settlement cannot escape characterization as gambling funds:Gate users use USDT in exchange scenarios and use USDC to place bets and settle proceeds within the Polymarket scenario, but Gate also emphasizes a minimalist settlement experience with one-click conversion back to stablecoins and no cross-chain losses. In mainland judicial practice, virtual currency has generally been treated as property interests, fully meeting the criteria for characterization as "stakes" and "gambling funds," and criminal liability will not be exempted merely because of "on-chain settlement."
Main criminal risks that may be involved
It should be emphasized that the criminal-law assessment ultimately still depends on the specific facts of each case, and the level of risk is not the same for different parties. However, drawing on mainland practice experience, the following pathways merit particular attention.
(1) The crime of gambling / the crime of operating a gambling establishment
- Platform side (risk of accomplice / principal offender): Where a platform (such as Gate) connects to Polymarket and provides account linking, fund settlement, trade matching and settlement services, it is highly likely in judicial practice to be found to have "provided internet access, server hosting, network storage, communications transmission and other technical support for gambling websites" or to have "provided assistance in fund payment and settlement". If the platform participates in profit sharing, engages in extensive user acquisition, or provides a dedicated entry point, it is highly likely to be found to be an accomplice to the crime of operating a gambling establishment,accomplice, or may even be characterized as a principal offenderprincipal offender。
- User side (risk of accessory / related charges): Where a mainland user participates with extremely high frequency and the amount involved in gambling is huge, this may trigger a finding of "taking gambling as an occupation", constitutingthe crime of gamblingIf a user uses the platform's mechanisms to organize others to gamble against each other, or develops downline participants through invitation rebates and similar means, this directly implicatesthe crime of operating a gambling establishmentcriminal liability.
(2) Illegal business operations
Polymarket's "prediction trading" is in essence regarded as unapproved over-the-counter derivatives or event contracts, and is deeply intertwined with the exchange logic between virtual assets and fiat currency.
- Anticipated regulatory characterization: With reference to research by Lawyer Deng Xiaoyu, from a regulatory perspective such business is highly likely to be characterized as a type ofillegal event contract。
- Legal application: If such business is identified on a look-through basis as "illegal futures" or a "licensed financial business," it would violate administrative regulations such as the Regulations on the Administration of Futures Trading. Providing such services within the territory without market access approval would trigger Article 225 of the Criminal Law, constitutingillegal business operations。
- Defense logic trap: Although characterizing the project as a "contract" may to some extent offset a "gambling" characterization, the threshold and scope of the crime of illegal business operations are equally stringent.
(3) Crime of assisting information network criminal activities / crime of facilitating information network criminal activities
- Technology and funding channel risks: Even if direct collusion between the platform and gambling syndicates cannot be proven, the platform may still be found to constitutethe crime of assisting information network criminal activities。
- Independent criminal liability for promotional traffic diversion: Under the judicial interpretation, publishing information for, and conducting traffic diversion and promotion of, illegal or criminal activities may itself constitute an independent crime. In mainland judicial cases, there are already precedents in which persons acting as agents for or promoting virtual currency exchanges were convicted and punished forthe crime of illegally using information networksFor content promotion directed at accessing a platform such as Polymarket, which has pronounced gambling-related characteristics, the risk of criminal prosecution is extremely high.
Compliance guidance for platforms and industry teams
For users:
- "No VPN needed" is not a benefit but a trap: participating directly in Polymarket betting within the mainland is equivalent to voluntarily exposing oneself to criminal risk—at best, bank cards may be frozen and funds reduced to zero; at worst, one may face criminal case filing;
- Returns are not protected by law: even if one wins money, it may be deemed "gambling funds" and subject to recovery, and rights cannot be asserted through any channel;
- Do not harbor any false hope: current anti-fraud and anti-money-laundering monitoring already enables precise identification of crypto transactions, and "on-chain anonymity" is almost meaningless in the face of judicial tracing.
For practitioners:
- Packaging gambling operations under the gimmick of “prediction markets” or “Web3” is, in essence, a criminal offense that is merely old wine in a new bottle;
- Publicity claiming “no VPN required within mainland China” is a proactive signal to regulators that the service is “targeted at mainland users” and may become core evidence in criminal accountability;
- Any conduct providing technical, funding or traffic support for virtual-currency gambling or illegal financial activities may be found to constitute complicity; do not cross the line.
For platforms:
For platforms, integrating popular business lines, increasing trading activity and enhancing stablecoin circulation efficiency may have short-term product and growth value; however, in the context of mainland China regulation and criminal practice,an entry point does not equal an isolation layer; a redirect does not equal exemption from liability; and technical integration does not automatically mean neutrality.
If a platform forms a complete chain across account systems, fund pathways, redirect mechanisms, settlement facilitation, customer service support, tutorial guidance, marketing and publicity, and cooperative promotion,then even if the platform positions itself as an “integrator,” an “aggregator” or a “technical intermediary,” judicial practice may well conduct a look-through assessment based on the overall business structure.
In particular, where publicly disseminated content contains expressions with clear geographic targeting, such as “no VPN required domestically,” “accessible within mainland China” or “one-click entry,” the platform’s room to argue that it “does not provide services to mainland Chinese users” will be significantly narrowed; and the relevant promotional content itself may also become important evidence for subsequently establishing subjective knowledge, user targeting and transaction facilitation.
For such business, a more prudent compliance approach should be:
- Promptly verify whether the relevant functions, redirect pathways and disseminated content actually reach mainland Chinese users;
- Immediately review and address high-risk statements such as "no VPN required," "accessible within mainland China," and "one-click participation";
- Conduct a unified clean-up of messaging across official publicity, partner KOLs, channel agents, and community materials, to avoid creating an evidentiary chain of "platform acquiescence or joint traffic diversion";
- Carry out a dedicated risk review across product, operations, marketing, business development, customer service, and partner teams, to avoid employees and partners being passively exposed through lack of awareness or misjudgment;
- If the relevant functions or publicity have an obvious practical effect directed at mainland users, promptly take measures such as taking them offline, restricting access, issuing public clarifications, or cutting off traffic-diversion pathways.
For highly sensitive businesses, what truly warrants vigilance is never "missing a wave of traffic," but rather exposing the platform, employees, and partners as a whole to long-term and irreversible criminal and compliance risks for the sake of short-term growth.
Conclusion: True "risk hedging" is never about betting on odds, but about staying away from highly sensitive structures
If viewed solely through the narrative of product innovation, Gate's integration with Polymarket can indeed easily be packaged as a "Web3 experience upgrade."
However, from the perspective of criminal justice and regulatory logic in mainland China,
when a business simultaneously possesses the following characteristics:
- it conducts bet-style transactions around the outcomes of uncertain events;
- it completes fund flows and profit settlement through stablecoins;
- it has reachability or even convenience for users within mainland China;
- It is disseminated and converted through methods such as "no VPN required" and "one-click participation";
it can hardly continue to be simply understood as a "neutral technical tool" or "ordinary product innovation."Against the backdrop of the mainland's sustained high-pressure crackdown on cross-border gambling, coin-related illegal finance and related fund chains, what truly warrants vigilance is not odds fluctuation, but that the business structure itself has already entered a highly sensitive zone.
For every domestic user, practitioner and platform team, the true "risk hedge" has never been gambling on wins and losses in such products, but actively staying away from business structures that may cross criminal red lines.
After all,the safety of principal will always be more important than the temptation of odds.
Author of this article
Deng Xiaoyu，Partner lawyer at Mankun (Shenzhen) Law Firm. Lawyer Deng specializes in criminal cases and has participated in handling nearly three hundred cases, with solid theoretical grounding and rich practical experience. He is particularly adept in the field of Web3.0 crime and has provided criminal defense for a number of well-known digital currency exchanges, effectively safeguarding the rights and interests of clients. He has received the "Special Contribution Award for the 30th Anniversary of the Shenzhen Lawyers Association" and has been interviewed by a number of well-known domestic media outlets and invited by the industry to give lectures on several occasions.
About Mankun
Mankun Law Firm was established in 2015 and is a boutique law firm in China focused on the Web3.0 new economy and deeply engaged in the blockchain industry. Members of the Mankun team possess unique and diverse industry backgrounds, coming from well-known legal service institutions, state judicial organs, internet technology companies, crypto assets institutions, blockchain industry think tanks and others.
Based on a profound understanding of the new economy field, continuous attention to and research on policies and regulations, and rich practical experience, the Mankun team is adept at providing, from the perspectives of business models and legal practice, comprehensive legal services to new economy enterprises in Web3.0, blockchain, AI, NFT, digital collectibles, crypto funds, crypto payments, DeFi, real-world assets (RWA), GameFi and others, including business architecture design, project investment and financing, transaction planning, business compliance, resolution of complex civil and commercial disputes, criminal risk prevention and risk management, and criminal defense.
Mankun Law Firm is headquartered in Shanghai and has branches in Hong Kong, China, Silicon Valley in the United States, Shenzhen, Hangzhou, Zhengzhou, Chengdu and other locations. In response to the global compliance development needs of Web3 industry clients, Mankun has established local offices in major global crypto finance cities and selected local professional blockchain service partners to provide clients with legal and compliance services that offer global breadth and China depth.
