Two plaintiffs have filed a lawsuit against Polymarket in the New York State Supreme Court, alleging breach of contract and deceptive conduct tied to a prediction market on whether Strategy would sell any of its Bitcoin holdings by May 31. According to the complaint filed on July 3, the plaintiffs held “Yes” positions in the binary market. They argue that Strategy’s Form 8-K filed with the U.S. Securities and Exchange Commission shows the company did sell 32 BTC between May 26 and May 31. Despite that, Polymarket ultimately resolved the market as “No.” The complaint further claims that the platform added a clarification before settlement, effectively changing the resolution standard from whether a sale occurred by May 31 to whether the sale had been publicly confirmed by that date. Under that revised interpretation, the market was settled as “No” on June 3 following a UMA vote, the mechanism Polymarket uses to resolve disputed markets.
Lawsuit centers on how the market was resolved
On July 7, BlockBeats reported that two plaintiffs had sued Polymarket over a prediction market tied to whether Strategy would sell Bitcoin before the end of May. According to a complaint filed on July 3 in the New York State Supreme Court, plaintiffs William Wood and Thomas Bush named Polymarket, CEO Shayne Coplan, CMO Matthew Modabber, as well as other related entities and individuals, as defendants. The suit alleges breach of contract and deceptive conduct.
The complaint says the two plaintiffs held “Yes” positions in a binary market asking whether Strategy would sell any of its Bitcoin holdings by May 31. Citing Strategy’s Form 8-K filed with the U.S. Securities and Exchange Commission, the plaintiffs argue that the company did in fact sell 32 BTC during the period from May 26 to May 31. Even so, Polymarket ultimately resolved the market as “No.”
The plaintiffs further claim that before settlement, Polymarket added a clarification that effectively changed the standard from whether Strategy had completed a sale by May 31 to whether it had publicly confirmed that sale by May 31. Under that revised interpretation, the market was ultimately resolved as “No” on June 3 through a UMA vote, which is the mechanism Polymarket uses to settle disputed markets.
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