Polymarket is navigating a high-stakes week marked by global expansion pushes into Japan and regulatory bans in India, alongside a recent $520,000 smart contract exploit that left main user positions secure. Despite subdued Polygon (POL) token performance, the prediction giant continues to dominate 2026 trading volumes ahead of rumored token airdrops and an IPO.

South Korea's National Assembly finance committee is reviewing a petition with more than 52,000 signatures calling for the full repeal of the planned 22% cryptocurrency gains tax. The levy, set at 20% national income tax plus a 2% local charge, would apply to annual gains above about $1,665 and is currently scheduled to start on January 1, 2027 after three delays.

Polymarket suffered an exploit on Polygon targeting its UMA CTF Adapter smart contract, with losses reported near $600,000. On-chain investigator ZachXBT flagged the incident and linked activity to wallet 0x8F98075db5d6C620e8D420A8c516E2F2059d9B91, while users were warned to pause platform activity. On-chain data showed 5,000 $POL being removed roughly every 30 seconds during the drain phase.

NEAR Protocol rose nearly 29% over the last 24 hours, climbing to about $2.26 after dipping to $1.73, alongside daily trading volume approaching $1 billion. The move followed renewed attention on NEAR's AI-related product updates and a technical breakout above a multi-year descending trendline. Traders are watching $2.20 as near-term support and $2.30–$2.40 as the next resistance band.

More than a dozen bipartisan U.S. House members introduced the American Reserve Modernization Act of 2026 (ARMA) on May 21 to codify a federal Strategic Bitcoin Reserve. The proposal would require any BTC acquired for the reserve to be held for at least 20 years and would authorize the Treasury to buy up to 200,000 BTC per year for five years, aiming for 1 million BTC. It also includes audit-and-reporting requirements and a clause protecting lawful self-custody and transfers.

On-chain observers flagged unusual contract activity tied to Polymarket-linked infrastructure on Polygon, with outflows that appear to total more than $520,000. The activity was associated with addresses connected to the Polymarket UMA CTF Adapter, while an alleged attacker wallet and a related contract were also identified. Polymarket and UMA have not publicly clarified the incident details or whether users were directly impacted.

AmericanFortress published a cryptography paper describing a patent-pending, post-quantum signature method for hierarchical deterministic (HD) wallets. The design keeps existing BIP32-Ed25519 public keys and replaces the Ed25519 signing step with a ZK-STARK proof, aiming to avoid chain switches or mandatory fund migration. The paper also reports current performance figures, including sub-10-second signing proofs, 18–19 ms verification, and a fixed 218.4 KB signature size.

Polymarket is preparing a push into Japan by appointing Mike Eidlin as its local representative and starting a lobbying campaign, with the goal of receiving authorization to run prediction markets by 2030. The platform reported its first $10 billion monthly trading volume in March 2026 and said it reached 678,342 unique users in April as it rolls out updates such as Polymarket USD.