Traders Take Polymarket to Court After Changing Rules in Strategy Bitcoin Market

Two traders have filed a lawsuit against prediction market platform Polymarket, accusing the company of improperly resolving a market tied to Strategy's Bitcoin sale and denying winning bettors their payouts.

The complaint, filed in the New York Supreme Court on July 3, alleges that Polymarket changed the market's interpretation after the outcome had already occurred. The lawsuit names Polymarket CEO Shayne Coplan and Chief Marketing Officer Matthew Modabber as defendants.

The plaintiffs, William Wood and Thomas Bush, are seeking payment on their winning "Yes" positions, along with damages, legal fees, and other relief. Their claims include breach of contract, deceptive business practices, unjust enrichment, and false advertising.

Strategy's Bitcoin Sale Sparks Dispute

The Polymarket lawsuit centers on a contract asking whether Strategy would sell any Bitcoin before May 31.

According to the complaint, Strategy fulfilled that condition by selling 32 BTC between May 26 and May 31, a transaction later disclosed in the company's June 1 SEC filing. It marked Strategy's first Bitcoin sale since 2022.

However, because the filing was published one day after the market's deadline, Polymarket ruled that the event did not qualify. The platform ultimately resolved the market as "No" following a vote by holders of UMA, the decentralized oracle protocol used to determine disputed outcomes.

The traders argue that the market's original rules identified Strategy's official disclosures as the primary source for determining the result and did not require confirmation before the deadline itself.

According to the lawsuit, Polymarket introduced the requirement only after the event, effectively changing the rules once trading had concluded.

Traders Challenge Polymarket's Resolution Process

The plaintiffs argue that Strategy's SEC filing clearly confirmed the Bitcoin sale occurred within the specified timeframe and that the platform's decision undermines confidence in prediction markets designed to rely on objective outcomes.

The case raises broader questions about how decentralized prediction markets handle disputed events, particularly when outcomes depend on governance votes rather than predetermined rules.

Growing Scrutiny of Prediction Markets

The Strategy dispute comes amid increasing scrutiny of Polymarket's market resolution process.

According to reports, the platform has recorded more than 1,150 disputed markets in 2026, already exceeding the total number of disputes logged throughout 2025.

Previous investigations by Bloomberg and The Wall Street Journal also found that a relatively small group of large wallets has influenced numerous market outcomes, with some UMA voters reportedly holding financial positions in the markets they help resolve.

The Strategy market follows another high-profile controversy last year involving a $237 million prediction market over whether Ukrainian President Volodymyr Zelenskyy wore a suit, a case that also generated significant debate over market settlement procedures.

Strategy Continues Bitcoin Monetization

The legal dispute comes as Strategy has adopted a more flexible approach to managing its Bitcoin treasury.

After selling 32 BTC in late May, the company later announced plans to sell up to $1.25 billion in Bitcoin to support dividend payments. Earlier this week, Strategy confirmed another sale of 3,588 BTC, raising approximately $216 million under its Bitcoin monetization program.

Meanwhile, Polymarket has not publicly commented on the lawsuit.

The case arrives as the prediction market platform continues to expand. Its U.S. business now operates as a CFTC-registered exchange, while reports earlier this year indicated the company was seeking to raise $400 million at a $15 billion valuation, following significant investment from Intercontinental Exchange (ICE).