Two Polymarket Traders Sue Over Disputed Market Ruling, Claiming $6.5M Loss

Two Polymarket users, William Wood and Thomas Bush, have filed a breach-of-contract lawsuit against the prediction market platform, alleging it improperly settled a market tied to whether Strategy would sell Bitcoin by May 31. According to the complaint, the pair held "Yes" shares in a binary market that paid out if Strategy sold BTC by the end of May. Strategy later disclosed in an SEC filing that it sold 32 BTC between May 26 and May 31. The plaintiffs say Polymarket nonetheless resolved the market as "No" after adding new "clarifying" language and following a final UMA vote. They argue the change effectively shifted the standard from whether a sale occurred by May 31 to whether the sale was publicly confirmed by May 31, which they say breached the contract. Represented by Burwick Law, the plaintiffs contend that the platform's approach allowed it to control payouts despite what they describe as a clear, provable outcome. Wood said the decision resulted in roughly $6.5 million in losses across 1,868 traders who held "Yes" shares. Galaxy Research criticized the resolution in June, calling the "No" outcome a "failure" and arguing that "Yes" buyers correctly predicted the event. Polymarket had not publicly responded to the lawsuit at the time of writing. Policy analyst Thomas Braziel said the case could become one of the most consequential lawsuits in the prediction market space if it prompts scrutiny of UMA's dispute-resolution practices. The sector is facing rising regulatory and legal pressure, including cases involving ethics, insider trading, and jurisdictional disputes between state authorities and the federal Commodity Futures Trading Commission (CFTC). The CFTC is also moving toward a clearer regulatory framework for prediction markets. Final Summary: Two traders are suing Polymarket over alleged breach of contract and deceptive practices tied to a contested market settlement that they say contributed to $6.5 million in losses. A policy analyst said the case could prove consequential if it clears key procedural hurdles.