Polymarket hit with New York lawsuit over Strategy Bitcoin market

Polymarket has been sued in New York after two users alleged the prediction platform wrongly denied payouts on a Strategy Bitcoin market despite the company disclosing a Bitcoin sale in an SEC filing. Summary Polymarket has been sued in New York over claims it wrongly denied payouts on a Strategy Bitcoin prediction market. The lawsuit alleges Strategy’s SEC filing confirmed a Bitcoin sale before the deadline but the market was still resolved as No. Plaintiffs claim Polymarket changed the market’s resolution criteria after the outcome and are seeking damages for breach of contract and deceptive business practices. According to a complaint filed in the Supreme Court of the State of New York on July 3, plaintiffs William Wood and Thomas Bush alleged that Polymarket refused to redeem winning “Yes” shares tied to a market asking whether Strategy, formerly MicroStrategy, would sell any of its Bitcoin by May 31, 2026. The lawsuit names Adventure One QSS Inc., Blockratize Inc., Polymarket founder Shayne Coplan, Chief Marketing Officer Matthew Modabber, and unnamed defendants. Polymarket lawsuit: pic.twitter.com/OEwLjE5DEz — Burwick Law (@BurwickLaw) July 6, 2026 The plaintiffs claimed Strategy’s own Form 8-K filing with the U.S. Securities and Exchange Commission disclosed the sale of 32 Bitcoin during the reporting period ending May 31, 2026, which they argue satisfied the market’s original binary question. According to the filing, the SEC disclosure was identified as the market’s primary resolution source, leaving no ambiguity over the outcome. Plaintiffs allege rules were changed after the outcome Instead of paying winning traders, the complaint alleged Polymarket resolved the market as “No” after posting additional clarification language that effectively changed the question from whether Strategy sold Bitcoin by the deadline to whether the sale had been publicly confirmed by that date. The lawsuit argued the platform used the timing of the SEC disclosure rather than the timing of the underlying transaction to settle the market. According to the plaintiffs, the market concerned the occurrence of the sale itself, while the SEC filing merely served as evidence of that event. You might also like: Bitwise CEO says Bitcoin wants higher after Strategy BTC sale Court filings further alleged the dispute was not based on an unclear or subjective outcome but on what the plaintiffs described as an objective corporate event documented by Strategy’s own regulatory filing. They argued that allowing resolution standards to change after the event undermined Polymarket’s advertised promise of fixed, rules-based markets. The complaint seeks damages for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, money had and received, and alleged deceptive business practices and false advertising under New York General Business Law.