Polymarket Sued After Traders Claim Platform Changed Rules in $80 Million Strategy Bitcoin Bet

Polymarket is facing another lawsuit after two traders accused the prediction market platform of retroactively changing the rules of an $80 million market tied to Strategy’s Bitcoin sales. The plaintiffs allege they correctly predicted that Michael Saylor’s company would sell Bitcoin before May 31, but Polymarket later resolved the market as “No” after adding a clarification requiring the sale to be publicly confirmed before the market deadline. The lawsuit raises new questions about how decentralized prediction markets resolve disputed outcomes and whether rule changes can occur after trading has effectively ended.

The lawsuit was filed in New York Supreme Court by traders William Wood and Thomas Bush, who claim the platform’s decision improperly denied payouts to thousands of “Yes” bettors. They are seeking damages, legal fees, and payment of their winning positions while also accusing Polymarket of deceptive business practices and breach of contract.

The Dispute Centers on Strategy’s Bitcoin Sale

The prediction market asked a straightforward question:

Would Strategy sell any Bitcoin by May 31?

On June 1, Strategy filed an SEC disclosure confirming that it had sold 32 BTC between May 26 and May 31, marking the company’s first Bitcoin sale since 2022. The filing clearly stated the transactions occurred within the required time period, but because the disclosure itself was published after the market closed, controversy quickly followed.

Many traders believed the filing confirmed the “Yes” outcome.

Polymarket Ruled “No”

Despite Strategy confirming the Bitcoin sale occurred before May 31, Polymarket ultimately resolved the contract as “No.”

Before settlement, the platform added an additional clarification stating that:

“Confirmation achieved outside of the market’s timeframe does not qualify.”

That clarification became the foundation for the final resolution after voting through UMA’s decentralized oracle system. Plaintiffs argue this requirement did not exist in the original market rules and fundamentally changed the contract after trading had already concluded.

Plaintiffs Claim the Rules Were Changed After the Fact

According to the lawsuit, the original contract stated that primary resolution would rely on:

• Information from Strategy.
• On-chain blockchain data.
• Consensus from credible reporting.

The traders argue Strategy’s SEC filing provided exactly the evidence required under those rules because it documented that the Bitcoin sale occurred before the stated deadline.

They contend Polymarket improperly shifted the focus from when the event occurred to when the event became publicly confirmed, creating a new requirement that was never disclosed when the market opened.

Oracle Governance Faces Growing Scrutiny

The market was ultimately resolved through UMA’s optimistic oracle system.

When disputes arise, UMA token holders vote on the final outcome of prediction markets. Critics argue this governance model can create conflicts of interest because some voters may also hold financial positions in the markets they are resolving.

According to reports, Polymarket has already recorded more than 1,150 disputed markets during 2026, exceeding the total number of disputed markets seen throughout all of last year. The Strategy market has become one of the platform’s most closely watched governance controversies to date.

Polymarket Continues Growing Despite Legal Challenges

The lawsuit arrives during a period of rapid expansion for Polymarket.

The prediction market platform has attracted billions of dollars in trading volume while expanding into regulated markets and securing major institutional investment. At the same time, it has faced increasing scrutiny over how controversial markets are settled, particularly when outcomes depend on subjective interpretations of real-world events.

The company has not publicly responded to the latest lawsuit.

Prediction Markets Face New Legal Tests

The Strategy dispute highlights one of the biggest challenges facing decentralized prediction markets.

Unlike sports scores or election results, some events require interpretation rather than simple verification. Questions surrounding disclosure timing, corporate filings, regulatory announcements, and ambiguous language can create disagreements over how contracts should resolve.

As prediction markets continue expanding into financial events, governance decisions may become just as important as the underlying market itself.