Traders Sue Polymarket Over Market Ruling on Bitcoin Sale

On July 3, 2026, traders William Wood and Thomas Bush filed a lawsuit against Polymarket in the New York Supreme Court. They claim that the prediction market platform improperly ruled that their market on whether Strategy would sell Bitcoin by May 31 resolved as "No," despite the firm disclosing a sale of 32 Bitcoin during that period. This ruling came a day after the deadline for official market confirmation, which the plaintiffs describe as a retroactive adjustment to the rules.

The basis of the complaint involves allegations of breach of contract, unjust enrichment, and false advertising. The traders are seeking a payout of $1 per-share on their "Yes" contracts along with damages. The conflict centers around a rule implemented by Polymarket stating that confirmations made outside the market’s stipulated timeframe should not count, which they argue is misleading.

The controversy arises from Strategy’s SEC filing, disclosed on June 1, that confirmed it had sold the Bitcoin, constituting proof under the market's own rules, which emphasized using the company’s disclosures as the primary source of confirmation. Despite this, Polymarket ruled against the traders, stating the confirmation did not adequately meet their cutoff.

In the wake of the ruling, the traders express their frustration, noting that 1,868 users lost a combined $6.5 million during this incident. One trader commented, "Polymarket scammed me for $500K," illustrating the financial stakes involved. The plaintiffs highlight that the breach undermines trust in prediction markets and disrupts their operations by altering contractual terms retroactively.

Further complicating matters, Strategy has indicated plans to sell up to $1.25 billion in Bitcoin to fund dividends, following their initial sale. Investors and stakeholders are monitoring this lawsuit closely as it could set precedent affecting future operations of prediction markets.