Polymarket Sued Over Disputed Strategy Bitcoin Market

Two Polymarket users filed a complaint on July 3 in the New York State Supreme Court, alleging the prediction market operator changed its interpretation of a contract about whether Strategy Inc. sold Bitcoin by May 31, 2026, and denied payouts to winning “Yes” positions. The suit names Adventure One QSS Inc. d/b/a Polymarket.com, Blockratize Inc. d/b/a Polymarket, CEO Shayne Coplan, CMO Matthew Modabber and unnamed defendants.

The market asked whether Strategy would “sell any of its Bitcoin by May 31, 2026.” Plaintiffs William Wood and Thomas Bush point to a June 1 Form 8-K filed by Strategy that reported a sale of 32 Bitcoins during May 26–31 and say that should have produced a “Yes” resolution. Polymarket settled the market as “No.”

Polymarket’s market page includes an “Additional context” note stating: “No information from MSTR, on-chain data, or consensus of credible reporting confirmed that MicroStrategy sold Bitcoin within the market’s timeframe.” It also says, “Confirmation achieved outside of the market’s timeframe does not qualify.” The plaintiffs say the SEC filing meets the contract’s timeframe and should have triggered payment to “Yes” holders.

The complaint alleges Polymarket altered the market’s interpretation after the outcome and controlled the resolution process despite using UMA’s Optimistic Oracle. The filing asserts Polymarket drafted the market rules, issued clarifications to users and framed the question submitted for resolution. The complaint opens: “A prediction market has one purpose: to reward people for being right about the world.”

Plaintiff William Wood posted on X before filing the suit, stating the resolution cost him about $500,000 and accusing the platform of denying payouts to traders who held “Yes” positions. He posted that 1,868 traders lost a total of $6.5 million. The market page displays a notice reading “We’re aware of the dispute in this market.”

The complaint asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, money had and received, unjust enrichment, and deceptive business practices and false advertising under New York General Business Law Sections 349 and 350. The plaintiffs seek damages, restitution, injunctive relief, attorneys’ fees, interest and payment of the denied value of their “Yes” positions.

The filing asks the court to determine whether Polymarket or the oracle system ultimately controlled disputed resolutions and whether users were given consistent rules for settling markets.