A Polymarket Bet On Strategy Selling Bitcoin Was Settled Wrong, 2 Traders Claim In New Lawsuit

Two traders have taken Polymarket to court over a prediction market they say was “settled incorrectly” — and the evidence at the center of their claim is a filing with the US Securities and Exchange Commission (SEC). 

William Wood and Thomas Bush filed a lawsuit in New York Supreme Court alleging breach of contract, deceptive practices, and unjust enrichment after the platform resolved a market about Strategy’s (Previously MicroStrategy) Bitcoin sales as “No.”

Did Polymarket Rewrite The Rules? 

According to the filing disclosed by Decrypt, Strategy answered that question itself by filing a Form 8-K with the SEC disclosing the sale of 32 Bitcoin during the period ending May 31. 

Wood and Bush held “Yes” shares in the market. Their legal team argued in the filing that the answer was not a matter of judgment or inference. “There was nothing to interpret,” the filing states. “The question was binary. The answer was documented by the issuer itself.”

Polymarket resolved the market “No.” After the fact, the platform posted what it described as clarifying language, redefining the resolution criteria to require that the sale be publicly confirmed before May 31 — not just that it occurred by May 31. 

The plaintiffs argue that distinction was invented after the result was already known. They claim the SEC filing was proof of that event. Polymarket, in their telling, used the timing of the public disclosure to defeat what the disclosure actually proved.

The filing states directly: “If Defendants can impose a confirmation-by-deadline requirement after the fact in a market this objective, then the advertised promise of pre-defined, rules-based resolution is materially misleading.”

Nearly $800,000 In Disputed Winnings 

The filing also shows that Wood held approximately 695,704 “Yes” shares that should have redeemed at $1.00 each, for a total redemption value of around $695,704. He paid approximately $530,023 to acquire those shares and is seeking that amount in restitution as an alternative. 

Bush held around 101,494 “Yes” shares valued at $101,494 at the $1.00 redemption price, acquired for approximately $66,258. Together the plaintiffs are seeking damages of not less than $797,198 in denied redemption value, or alternatively not less than $596,281 in acquisition cost restitution, in each case before interest, fees, and legal costs.

The claims include breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and violations of New York General Business Laws, which cover deceptive and unfair business practices and false advertising. 

The plaintiffs are also seeking an injunction against Polymarket continuing the practices described in the filing, along with statutory and treble damages where available under New York law.

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