According to a senior official involved in shaping the country’s digital economy policy, there is no legal way for Web3 prediction markets to operate in Ukraine under current laws.
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 Ukraine’s Digital Economy at the Ministry of Digital Transformation, revealed a stalemate for Web3 prediction markets in the country.
Nikolaievskyi said that while 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,’” Nikolaievskyi said. He added that a long-delayed law “On Virtual Assets” is necessary for companies, not just individuals, to operate legally using cryptocurrencies.
Until that law is passed, platforms that use cryptocurrencies to facilitate betting on the outcomes of events, including Polymarket, are effectively unlicensed gambling operators in the eyes of the State.
“This actually 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 that are cracking down on it.
Previously, the National Commission of Ukraine for State Regulation of Electronic Communications (NKEK) issued a directive requiring Internet service providers to block access to the prediction market.
‘War-related’ bets
The order followed a recommendation from PlayCity, Ukraine’s state gambling regulator, which cited Polymarket’s lack of a gaming license and the nature of its markets, which include bets tied to the war between Russia and Ukraine.
While Nikolaievskyi insisted that the ban was based on existing legal grounds and was carried out through proper channels, he acknowledged that war-related markets may have prompted regulators to act more quickly.
“We cannot rule out the fact that the presence of ‘war-related’ betting on the platform has accelerated the decision to block it, drawing the regulator’s attention,” 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 formal complaints about platforms suspected of violating gambling laws.
That means a single citizen report could trigger similar enforcement actions against other prediction markets, even if they have so far remained under the radar.
There may still be a way
Still, the ban appears to directly target the platforms, not the users.
According to Nikolaievskyi, there is currently no legal effort underway to go after people who interact with platforms like Polymarket using virtual private networks (VPNs) or directly interacting 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 have he seen examples of users being held responsible for bypassing the blocks.
The legal change is not likely to come anytime soon. Nikolaievskyi said that any revision of Ukraine’s gambling definition would have to be approved by Parliament and that “the probability of its revision is extremely low,” especially during times of war.
