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Taiwanese law enforcement has initiated an investigation into online influencers and community members involved in promoting a Polymarket contract related to Taiwan’s upcoming election. 

According to a report from Taiwan-based media outlet BlockTempo, the country’s authorities have sent subpoenaes to several influencers and individuals within the crypto community.

Polymarket allows users to place bets on the outcome of the January election, with over $300,000 currently wagered on various contracts. 

The market currently gives the Democratic Progressive Party’s Lai Ching-te, also known as William Lai, a 78% chance of winning.

However, betting on election outcomes is explicitly prohibited under Article 88-1 of Taiwan’s Presidential and Vice Presidential Election and Recall Act. 

The 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,” Sherman Lin, an attorney at Taipei-based Lin & Partners, said.

“Broad legal interpretations have been applied to gambling crimes under the Presidential Election and Recall Act, leading to investigations and convictions of gambling website operators in Taiwan targeting Taiwanese gamblers.”

While gambling on election outcomes is illegal in most U.S. states, 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 posed by overseas entities limit Taiwan’s legal reach primarily to domestic actors, making it difficult to enforce actions against platforms like Polymarket. 

Taiwan to Target Influencers Who Promoted Polymarket

Lin noted that law enforcement would likely focus on online influencers who promoted the contract since they can be targeted within Taiwan’s jurisdiction.

Lin further explained that there is no established legal precedent in Taiwan for decentralized platforms organizing election betting, despite existing legal precedents for going after centralized entities involved in election gambling. 

The decentralized nature of Polymarket and its lack of physical presence in Taiwan could limit the Taiwanese judicial system’s authority over the platform.

Recent cases involving Taiwanese prosecutors pursuing online influencers who promoted trading platforms demonstrate that even promotional activities can have legal implications. 

For instance, when the unlicensed crypto exchange JPEX collapsed in Hong Kong, local law enforcement arrested several online influencers who had promoted the platform.

Earlier this week, Taiwan’s Financial Supervisory Commission (FSC) set up a Financial Technology Bureau to oversee cryptocurrencies to protect investors and increase regulation.

The FSC-managed Fintech Bureau will be responsible for increasing regulation around the cryptocurrency market.

In Novemer, Taipei-based trading platform Kronos Research suffered a cybersecurity breach, leading to a staggering $26 million loss in crypto assets. 

The FSC is also exploring the possibility of introducing cryptocurrency exchange-traded funds (ETFs) and has revealed that it is closely studying foreign cryptocurrency futures products and ETFs. 

The intention is to gradually ease restrictions in alignment with global market conditions.

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