Polymarket Sued for Denying Payouts on Strategy Bitcoin Bet

Highlights:

• Burwick Law filed a lawsuit in New York accusing Polymarket of wrongly resolving a Strategy Bitcoin market.
• Traders say Strategy’s SEC filing showed a 32 Bitcoin sale before the market deadline.
• Plaintiffs allege Polymarket changed settlement language afterward and denied payouts to winning “Yes” holders.

Polymarket, a popular crypto prediction platform, is facing a major legal challenge over how it handles user bets. On July 6, the New York-based legal firm Burwick Law announced a landmark lawsuit against the company and related defendants. The legal action was filed in the Supreme Court of the State of New York, County of New York, on behalf of two traders, William Wood and Thomas Bush. This case questions the fairness of market resolutions and the legal rights of everyday users who participate in these betting platforms.

In prediction markets, users have an opportunity to trade their shares depending on the result of a particular event in the real world. The user just needs to bet “Yes” or “No” on some specific questions using cryptocurrency. The site is supposed to give rewards to those who win in accordance with the terms and conditions. But according to the latest complaint, Polymarket violated its own terms.

🚨JUST IN: POLYMARKET SUED OVER ITS DISPUTED STRATEGY BITCOIN SALE IN MAY

Two traders have reportedly filed a lawsuit claiming Polymarket wrongly resolved a market asking whether Strategy sold Bitcoin by May 31.

On June 1, Strategy disclosed it sold 32 BTC between May 26 and… pic.twitter.com/MTNDNvFP4L

— Coin Bureau (@coinbureau) July 7, 2026

Traders Challenge Polymarket’s Decision After Strategy Bitcoin Sale

The conflict centers around a specific market asking if Strategy Inc., a corporate treasury company formerly known as MicroStrategy, sold any of its Bitcoin by May 31. The original rules clearly stated that the market would resolve to “Yes” if the company sold any digital assets before 11:59 p.m. ET on the deadline. According to the lawsuit, an official filing with the United States Securities and Exchange Commission (SEC) proved that Strategy Inc. actually sold 32 Bitcoin during that exact timeframe.

Despite this clear proof, Polymarket reportedly resolved the market as “No.” The plaintiffs argue that the platform added extra language after the fact to change the grading standard. By changing the rules late in the game, the platform allegedly avoided paying the users who held the winning “Yes” shares. This sudden shift left many traders confused and frustrated with the outcome.

Traders Seek Damages Over Disputed Market Outcome

Because of these actions, the lawsuit brings several serious charges against Polymarket. The plaintiffs accuse the company of breach of contract, false advertising, deceptive business practices, and unjust enrichment. They are asking the court for financial damages, restitution, and legal fees. The legal team at Burwick Law notes that this is one of the first major lawsuits focused entirely on prediction market accountability and settlement procedures.

Such a lawsuit can become an example for the whole crypto betting industry to follow. Since the use of such platforms becomes more widespread, people start demanding that there is nothing fraudulent happening in terms of payouts. In case the court decides to rule in favor of the traders, there will definitely be an increase in transparency concerning bet settlements and payments.