Two users have sued Polymarket, the forecasting market platform, in the New York State Court, alleging that the platform wrongfully refused to pay the winning slot in a market related to the sale of Strategy Bitcoin. According to the indictment, Strategy's submission to the United States Securities and Exchange Commission disclosed that 32 bitcoins had been sold by the company during the reporting period as at 31 May 2026, but the market was ultimately closed as “No”.
The dispute revolves around the settlement caliber.
The plaintiffs, William Wood and Thomas Bush, stated that the market in question was whether Strategy (formerly MicroStrategy) would sell any bitcoin before 31 May 2026. The statement of claim states that the market had previously listed Strategy's SEC document as the primary basis for settlement and that the sales disclosed in the company's 8-K document were sufficient to support the “yes” result.
The plaintiff claimed, however, that Polymarket had subsequently added an additional statement, in effect changing the issue from “whether or not the sale took place” to “whether or not it was publicly recognized for sale before the deadline”. According to this calibre, the platform ultimately settles the market as “No” and refuses to pay to users holding a “yes” share.
The plaintiff claimed that the platform changed the rules after the event.
According to the pleadings, the dispute did not arise from ambiguity, but from the fact that the settlement criteria were changed after the result had emerged. The plaintiff argued that what really ought to be judged was whether the sale itself had taken place and that the SEC document was merely evidence of the incident and should not be substituted for the event.
The plaintiff also argued that if the platform could adjust the interpretation after the results were clear, it would weaken its externally claimed “fixed-rule” market mechanism. As a result of the proceedings, numerous allegations of breach of contract, improper enrichment, misleading business practices and false advertising were raised, and compensation was sought for loss, attorney ' s fees, interest and injunction relief.
The suit is both for executives and related companies.
The suit was filed on 3 July and the court of appeal was the Supreme Court of New York. The accused include Adventure One QSS Inc., Blockratize Inc., Polymarket founder Shayne Coplan, Chief Marketing Officer Matthew Modabber, and other unaccused persons.
It was also mentioned that although the UMA Optimistic Oracle was used for contractual settlement, the preparation of market rules, the publication of additional notes, page management and the presentation of issues remained under the control of the Platform. On this basis, the plaintiff argued that the Platform could not attribute the dispute exclusively to the predictive process.
Additional information:According to the report, Polymarket also faces more regulatory scrutiny in the near future. Bloomberg previously reported that the United States Commodity Futures Trading Commission was investigating various parts of the company ' s business, including its social media operations.