Two Polymarket traders have filed a bold lawsuit against the giant prediction market platform, alleging that a last-minute change to the contract rules cost them hundreds of thousands of dollars on a bet tied to a Bitcoin sale.
The Bitcoin Sale Deadline
The New York-filed lawsuit focuses on a Polymarket contract asking whether Strategy, the former MicroStrategy, would sell any of its Bitcoin holdings before a specific date, namely, May 31, 2026.
The plaintiffs, William Wood and Thomas Bush, claim that Polymarket should have resolved in favor of “Yes” after Strategy sold Bitcoin during the specified period, but the platform did the opposite and settled the contract as “No.”
According to the complaint, Strategy sold 32 Bitcoin between May 26 and May 31. The transaction was later disclosed in a regulatory filing.
The traders, therefore, argues the transaction satisfied the original wording of the prediction market, which was whether the company would sell Bitcoin by the deadline.
The dispute appeared because the sale was revealed to the public after the deadline, and Polymarket resolved the market based on the interpretation that confirmation of the sale had to occur before the cutoff date.
The operator added that “confirmation achieved outside of the market’s time frame does not qualify,” as per the plaintiffs’ claims.
One of the traders, who used the account name willo_2, explained that he wagered approximately $695,000 on the “Yes” outcome after he reviewed what he thought were clear contract rules.
The bet would have brought him about $220,000 in profit if the market had resolved in his favor, according to his account of the event.
The lawsuit alleges that Polymarket used the so-called “bait-and-switch” move by changing the rules after the two traders had already committed their money.
The plaintiffs claim more than $6.5 million in outstanding contracts were held on the side that ultimately lost under the revised interpretation.
Accusations of False Advertising and Deceiptive Practices
The complaint now accuses Polymarket of breaching contract, making use of false advertising, unjust enrichment, and deceptive practices.
The duo argues that the platform’s marketing around transparent markets based on rules is in direct conflict with what they say occurred in the Strategy Bitcoin market.
The plaintiffs particularly criticized Polymarket’s resolution process, which relies on the UMA Optimistic Oracle system for disputed markets.
Polymarket has since continued offering Strategy Bitcoin sale-related markets, but has changed the focus to whether the company will announce a Bitcoin sale by a certain date, and not on whether a sale itself would occur.