Polymarket faces lawsuit over Bitcoin market dispute

Two traders sued Polymarket, alleging it unfairly denied payouts on a Bitcoin sale market by changing resolution criteria after the event, despite SEC filings confirming a sale before the deadline.

Two traders, William Wood and Thomas Bush, have filed a lawsuit in New York Supreme Court against Polymarket and related entities. They allege breach of contract and deceptive practices regarding the resolution of a prediction market on whether Strategy (formerly MicroStrategy) would sell Bitcoin by May 31, 2026. The plaintiffs held "Yes" shares, expecting a payout after an SEC Form 8-K disclosed that Strategy sold 32 BTC between May 26 and 31. However, Polymarket settled the market as "No" after adding clarification language that plaintiffs argue changed the original terms, requiring public confirmation of the sale by the deadline, not just the sale itself. The lawsuit claims this post-event change undermined Polymarket's promise of objective, rules-based outcomes. It raises broader concerns about the reliability and fairness of decentralized prediction markets when interpreting and resolving event outcomes.