- Two Polymarket traders have sued over a disputed prediction market tied to whether Strategy sold bitcoin by May 31.
- The complaint says Strategy’s own SEC filing showed a 32 BTC sale during the market window, while Polymarket ultimately resolved the market as “No.”
- The case highlights why clear rules and reliable dispute processes matter as crypto prediction markets grow.
Two traders have taken Polymarket to court over a disputed market result, raising fresh questions about how crypto prediction markets settle close or contested outcomes.
According to a July 7 report from The Block, William Wood and Thomas Bush filed a complaint in the New York Supreme Court on July 3. The lawsuit names Polymarket, CEO Shayne Coplan, CMO Matthew Modabber, and related parties as defendants.
The dispute centers on a binary prediction market asking whether Strategy, the company formerly known as MicroStrategy, would sell any of its bitcoin by May 31. A binary market has only two outcomes, usually “Yes” or “No.” Traders buy shares based on which outcome they believe will happen.
The plaintiffs say they held “Yes” shares. Their argument is based on Strategy’s Form 8-K filing with the U.S. Securities and Exchange Commission, which disclosed that the company sold 32 BTC between May 26 and May 31. In their view, that filing showed the event happened within the market’s stated time frame.
Polymarket ultimately resolved the market as “No.” The complaint says the platform later added clarifying language that effectively required public confirmation by the May 31 deadline, rather than only requiring the sale itself to have happened by that date. The market’s final review ended with a “No” result on June 3 after a vote through UMA, the oracle system Polymarket uses to settle disputed markets.
An oracle is a tool that brings outside information into a blockchain system. In prediction markets, it helps decide which outcome should be paid. When users disagree with the result, the dispute process becomes especially important because real money is attached to the answer.
The lawsuit alleges breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and violations of New York laws covering deceptive acts and false advertising. The plaintiffs are seeking damages to be decided at trial, including the $1-per-share redemption value they say their “Yes” positions should have received, plus legal fees and costs.
For the wider crypto industry, the case is not only about one market. It points to a broader issue for prediction platforms: users need to know whether market rules depend on when an event happens, when it becomes public, or how a dispute body interprets the wording after the fact.
Clear resolution rules are important for trust. If traders believe rules can shift after money is committed, prediction markets become harder to rely on as tools for information, hedging, or market analysis.
This article is for informational purposes only and is not financial advice.
