William Wood and Thomas Bush filed a lawsuit against Polymarket on July 3 in the New York Supreme Court, alleging breach of contract and deceptive practices over the resolution of a prediction market tied to whether Strategy would sell bitcoin by May 31. The complaint names Polymarket, CEO Shayne Coplan, CMO Matthew Modabber, and other related entities as defendants. The plaintiffs held 'Yes' shares in a binary market asking whether Strategy would sell any bitcoin holdings by May 31. Strategy disclosed in a Form 8-K filing with the U.S. Securities and Exchange Commission that it had sold 32 BTC between May 26 and 31. Polymarket ultimately resolved the market as 'No' after adding clarifying language that plaintiffs allege effectively required public confirmation by the May 31 deadline rather than merely a sale by that date. On June 3, a UMA vote concluded the final review in a 'No' outcome. Prediction markets use decentralized voting mechanisms like UMA to resolve disputed outcomes when initial resolutions face challenges from participants.
Polymarket Resolves Market as No Despite Strategy 8-K Filing
The binary market asked whether Strategy would sell any of its bitcoin holdings by May 31. Strategy disclosed in its Form 8-K filing with the SEC that it had sold 32 BTC between May 26 and 31. According to the complaint, Polymarket added clarifying language post-resolution that plaintiffs allege effectively required public confirmation by the May 31 deadline rather than merely a sale by that date. The prediction market's final review concluded in a 'No' on June 3 after a UMA vote, which is used to resolve disputed markets on Polymarket.
Plaintiffs Allege Breach of Contract and Seek Damages
Plaintiffs claim Polymarket altered the market's terms post-resolution, violating the platform's core promise of rules-based, objective outcomes. They argue that Strategy's 8-K filing constituted clear proof under the market's stated rules, which designated information from Strategy as the primary resolution source. The filing states, '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. A prediction market that will not honor a proven, unambiguous event does not seek truth; it controls payout.'
Plaintiffs assert claims including breach of contract, breach of the implied covenant of good faith and fair dealing, money had and received, unjust enrichment, and violations of New York General Business Law regarding deceptive acts and false advertising. They seek damages to be determined at trial, including the $1.00-per-share redemption value of their winning 'Yes' shares, as well as legal fees and costs. No response from Polymarket has been detailed in the initial court filing.
Polymarket Records $10.7 Billion Monthly Volume in June
The prediction market platform hit its all-time high record for monthly trading volume in June. Its main platform attracted $10.7 billion, while its U.S. platform reported $3.25 billion, according to The Block's data dashboard.
FAQ
What did William Wood and Thomas Bush allege in their lawsuit against Polymarket?
William Wood and Thomas Bush filed a lawsuit on July 3 in the New York Supreme Court alleging breach of contract and deceptive practices. They claim Polymarket altered the terms of a prediction market post-resolution, resolving it as 'No' despite Strategy's 8-K filing showing it sold 32 BTC between May 26 and 31. Plaintiffs held 'Yes' shares and argue the platform violated its promise of rules-based, objective outcomes.
How did Polymarket resolve the Strategy bitcoin sale market?
Polymarket resolved the market as 'No' after adding clarifying language that plaintiffs allege required public confirmation by the May 31 deadline rather than merely a sale by that date. On June 3, a UMA vote upheld the 'No' outcome. Strategy had disclosed in a Form 8-K filing with the SEC that it sold 32 BTC between May 26 and 31.
