Key Points
- Polymarket faces a lawsuit filed July 3 in New York Supreme Court by two platform users.
- The dispute centers on a prediction market regarding whether Strategy would divest Bitcoin holdings prior to May 31.
- An SEC disclosure filed June 1 revealed Strategy sold 32 BTC during the market’s active period.
- Despite the filing, Polymarket resolved the market as “No,” which plaintiffs claim violates platform terms.
- The platform has recorded over 1,150 contested markets in 2026, surpassing 2025’s full-year figure.
Polymarket is defending itself against legal action brought by two platform participants who allege the company altered market resolution standards after the conclusion of trading activity.
William Wood and Thomas Bush submitted their legal filing to New York Supreme Court on July 3. According to their complaint, Polymarket’s resolution of a market concerning Strategy’s Bitcoin transactions denied them compensation they believe was rightfully theirs.
The legal action targets Polymarket CEO Shayne Coplan and CMO Matthew Modabber. The plaintiffs seek compensation of one dollar for each share, plus additional damages and attorney fees.
Their allegations include breach of user agreement, bad faith conduct, and deceptive marketing practices on Polymarket’s part.
The Market in Question
The contested prediction market presented a straightforward proposition: Would Strategy complete any Bitcoin sales before the end of May 31?
Strategy disclosed in an SEC filing dated June 1 that the company had liquidated 32 BTC during the May 26-31 window. This regulatory filing emerged one day beyond the market’s cutoff date.
Due to the timing of the disclosure, Polymarket appended a clarification stating the sale would not factor into the market’s resolution. The outcome was ultimately determined as “No” through a decision by UMA, the decentralized oracle service Polymarket employs for dispute adjudication.
Strategy has maintained its Bitcoin selling activity since that time. The firm has authorized sales reaching $1.25 billion to fund dividend distributions, and this week announced an additional $216 million in completed sales through its active program.
Plaintiffs Challenge Decision
Wood and Bush contend that SEC filings were precisely the documentation type specified in Polymarket’s market criteria. They maintain the filing unambiguously demonstrated a qualifying sale occurred during the designated period.
According to their complaint, Polymarket imposed additional conditions only after the trading window had expired. The plaintiffs stated that a market which disregards documented evidence “does not seek truth; it controls payout.”
Polymarket is confronting an unprecedented volume of market disputes this year. The platform has recorded more than 1,150 challenged markets in 2026, already exceeding the complete 2025 total.
Investigative reporting from Bloomberg and the Wall Street Journal has examined this trend. Both publications identified that a concentrated group of high-value wallets frequently influences resolutions, and that certain UMA participants maintain stakes in markets they vote to settle.
The Strategy Bitcoin dispute aligns with this established pattern. It represents Polymarket’s most significant controversy since the previous year’s $237 million market concerning Ukraine’s president and wardrobe decisions.
Burwick Law, legal counsel for Wood and Bush, reports receiving inquiries from additional traders with comparable grievances. Polymarket has not released an official response regarding the litigation.
Despite mounting legal challenges, Polymarket continues expanding its operations. The platform’s United States division now functions as a CFTC-registered derivatives exchange.
The company has also secured nearly $2 billion in investment from ICE, which owns the New York Stock Exchange. Polymarket achieved a $9 billion valuation in the previous year, and by April was reportedly pursuing additional capital at a $15 billion valuation.
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