Polymarket Sued Over Disputed Outcome of Bitcoin Prediction Market Sale

BlockBeats News, July 7th. Two plaintiffs have filed a lawsuit against Polymarket, accusing the platform of breach of contract and deceptive practices in a prediction market related to whether Strategy would sell Bitcoin by the end of May.

According to the complaint filed on July 3rd in the New York State Supreme Court, plaintiffs William Wood and Thomas Bush have named Polymarket, its CEO Shayne Coplan, CMO Matthew Modabber, and other related entities and individuals as defendants.

The complaint states that the two plaintiffs held a binary prediction market "Yes" position on the market question: Whether Strategy would sell any Bitcoin holdings by May 31st. According to a Form 8-K filed by Strategy with the U.S. Securities and Exchange Commission (SEC), the company indeed sold 32 Bitcoins (BTC) between May 26th and 31st.

However, the plaintiffs point out that Polymarket ultimately settled the market as "No." They claim that the platform added a clarification statement before the settlement, effectively changing the criteria from "whether the sale was completed by May 31st" to "whether the sale was publicly confirmed by May 31st." Due to this change in criteria, even though Strategy sold the Bitcoin within the timeframe, the prediction market was settled as "No" on June 3rd through a UMA vote (UMA is Polymarket's mechanism for resolving disputes in markets).