Two Polymarket Traders Sue Over "Strategy Sold Bitcoin" Contract Settlement

Two traders have sued prediction-market platform Polymarket in New York, claiming the site wrongly settled a contract tied to Strategy's Bitcoin sales and refused to pay holders of the "Yes" position. The complaint also names Polymarket CEO Shayne Coplan and Chief Marketing Officer Matthew Modabber. At the center of the dispute is a market asking whether Strategy would sell any Bitcoin before May 31. Strategy told the U.S. Securities and Exchange Commission in a filing dated June 1 that it sold 32 BTC between May 26 and May 31, its first Bitcoin sale since 2022. Despite the sale occurring within the stated window, Polymarket settled the market as "No," saying public confirmation came after the deadline and therefore did not satisfy its settlement criteria. That decision was later upheld through a vote by UMA token holders. UMA serves as the oracle mechanism Polymarket uses to resolve disputes. The plaintiffs argue Polymarket changed the rules after the fact. They say Strategy's SEC filings should have been decisive evidence because the market originally pointed to company disclosures as the primary information source. They contend that Polymarket later added a requirement to "complete public verification within the market's duration," a change they say directly drove the "No" outcome. The lawsuit alleges breach of contract, violation of the duty of good faith and fair dealing, deceptive business practices, and false advertising. The plaintiffs seek payment on their long position at $1 per share, plus damages and attorneys' fees. Case details - Filing date: July 3 - Venue: New York State Supreme Court - BTC sold: 32 The report also points to a rising number of disputes on the platform, saying Polymarket had more than 1,150 disputed markets by 2026, exceeding the total for the entire prior year. Bloomberg and The Wall Street Journal have previously reported that a small number of large wallets may materially influence some outcomes, and that certain UMA voters held positions in related markets. Burwick Law, representing the plaintiffs, said it is considering similar claims on behalf of other traders. Polymarket has not publicly responded. The lawsuit comes as Polymarket continues to expand. The report said its U.S. operations have become a registered exchange with the Commodity Futures Trading Commission. It also said the company recently received nearly $2 billion in support from ICE, the parent of the New York Stock Exchange, and is now valued at about $9 billion. In April, market chatter suggested Polymarket was seeking to raise $400 million at a $15 billion valuation.