Polymarket Sued Over Dispute Concerning Bitcoin Prediction Market Ruling Linked to Strategy’s Sale

Two plaintiffs have filed a lawsuit against Polymarket, alleging breach of contract and fraudulent conduct in a prediction market tied to whether Strategy would sell its Bitcoin holdings by the end of May. According to the complaint filed in New York State Supreme Court on July 3, plaintiffs William Wood and Thomas Bush named Polymarket, its CEO Shayne Coplan, CMO Matthew Modabber, and other related entities and individuals as defendants. The complaint states the two held "Yes" positions in a binary prediction market with the question: whether Strategy would sell any Bitcoin holdings by May 31. Per Strategy’s Form 8-K filings with the U.S. Securities and Exchange Commission (SEC), the firm did sell 32 Bitcoin (BTC) between May 26 and 31. However, the plaintiffs say Polymarket ultimately ruled the market "No". They allege the platform added a clarification ahead of settlement, effectively shifting the judgment criteria from "whether the sale was completed by May 31" to "whether the sale was publicly confirmed by May 31". Due to this criteria change, even though Strategy sold Bitcoin within the deadline, the prediction market was ultimately ruled "No" on June 3 via a UMA vote — Polymarket’s mechanism for resolving disputed markets.