Two Polymarket users sue in New York over settlement of Strategy Bitcoin-sales market

Two users have filed suit against prediction-market platform Polymarket in New York state court, alleging the company improperly denied payouts on winning positions tied to a market about Strategy's Bitcoin sales, according to CoinDesk. The complaint points to Strategy's disclosures to the U.S. Securities and Exchange Commission showing the company sold 32 Bitcoin during the reporting period that ended May 31, 2026. Despite that, the market was ultimately resolved as "No," and holders of "Yes" shares were not paid. Plaintiffs William Wood and Thomas Bush say the market asked whether Strategy (formerly MicroStrategy) would sell any Bitcoin before May 31, 2026. They contend the market initially identified Strategy's SEC filings as the primary settlement source, implying that a sale disclosed in an 8-K would support a "Yes" result. They allege Polymarket later issued additional clarifications that effectively shifted the standard from whether a sale occurred to whether a sale was publicly confirmed before the deadline, then used that framing to settle "No." The suit argues the dispute is not about the underlying facts but about settlement criteria being changed after the outcome was knowable. The plaintiffs maintain the core question should be whether the sale took place, with SEC documents serving as evidence rather than redefining the timing of the event. They add that allowing interpretation changes after the fact would weaken Polymarket's stated mechanism of operating under fixed rules. The case asserts multiple claims, including breach of contract, unjust enrichment, misleading commercial practices, and false advertising. It seeks damages, attorneys' fees, interest, and injunctive relief, and also names executives and affiliated entities. Filed July 3 in the New York State Supreme Court, the lawsuit names Adventure One QSS Inc., Blockratize Inc., Polymarket founder Shayne Coplan, Chief Marketing Officer Matthew Modabber, and other unnamed defendants. The complaint also notes that while Polymarket uses UMA's Optimistic Oracle for contract settlement, the platform controls market-rule drafting, supplemental clarifications, page management, and question framing, arguing disputes cannot be fully pinned on the oracle process. The report said Polymarket has recently faced heightened regulatory scrutiny. Bloomberg previously reported that the U.S. Commodity Futures Trading Commission is investigating parts of the company's operations, including its social media activity.