Two Polymarket users have sued the prediction market platform in New York state court, claiming the company changed the rules of a Bitcoin-related market after the underlying event had already happened and wrongly denied payouts to traders who correctly predicted the result.
The complaint, filed in the Supreme Court of the State of New York, names Adventure One QSS Inc., doing business as Polymarket.com; Blockratize Inc., doing business as Polymarket; Chief Executive Officer Shayne Coplan; Chief Marketing Officer Matthew Modabber; and additional unnamed defendants.
1 month ago, Polymarket scammed me for $500K, with 1,868 traders losing a total of $6.5M.Now we're taking Polymarket to court. t.co/RPlwQ6ARwI
— willo2 (@willo2_Poly) July 6, 2026According to the lawsuit, plaintiffs William Wood and Thomas Bush bought “Yes” shares in a market asking whether Strategy Inc., formerly MicroStrategy, would sell any of its Bitcoin holdings by May 31, 2026. They point to a Form 8-K filed with the U.S. Securities and Exchange Commission stating the company sold 32 Bitcoin during the relevant period, arguing that outcome meant the market should have resolved as “Yes.”
Bitcoin market dispute adds to Polymarket legal challenges
Instead, the complaint says Polymarket settled the market as “No” after adding clarification language that shifted the question from whether Strategy sold Bitcoin before the deadline to whether the sale had been publicly confirmed by that date. The plaintiffs argue the sale itself was the event participants were predicting, while the SEC filing merely documented that it had already occurred.
The lawsuit describes the disagreement as involving an objective and verifiable fact rather than an ambiguous prediction. It further argues that changing the governing standard after the event undermined the platform’s promise that markets are resolved using fixed, pre-defined rules. The plaintiffs also cite Polymarket’s marketing, including statements that users can “profit from [their] knowledge” and that its markets “seek truth,” alleging those representations influenced their trading decisions.
The filing also contends Polymarket exercises significant control over market outcomes despite saying contracts are resolved through the UMA Optimistic Oracle. According to the complaint, the company drafted the rules, controlled the interface, posted the disputed clarification, kept trading open afterward, and ultimately accepted the final outcome.
The case adds to a growing list of legal challenges facing Polymarket. Earlier this year, a proposed federal class action in New York alleged the platform operates as an illegal sports gambling business while presenting itself as a lawful prediction market. Separately, the Commodity Futures Trading Commission has pursued civil insider trading cases tied to Polymarket, including actions against a U.S. Army Special Forces soldier accused of using confidential military information and a Google engineer accused of trading on nonpublic search data. Both matters remain pending, and the allegations have not been proven in court.
Wood and Bush seek damages, restitution in the alternative, statutory and treble damages, injunctive relief, interest, attorneys’ fees, costs, and payment of the alleged unpaid $1.00-per-share redemption value for their winning “Yes” shares.
Featured image: Canva / Polymarket
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