Polymarket was sued in New York by two users who alleged the prediction platform wrongly denied payouts on a Strategy Bitcoin market. The plaintiffs claim Strategy disclosed a Bitcoin sale in an SEC filing, which should have resolved the market in their favor.
Polymarket was sued in New York by two users who alleged the prediction platform wrongly denied payouts on a Strategy Bitcoin market, even after the company disclosed a Bitcoin sale in an SEC filing.
"The platform refused to settle the market based on publicly available SEC filings," the plaintiffs said in the complaint filed July 7 in New York state court. The users are seeking damages for breach of contract and unjust enrichment.
The lawsuit centers on a market tied to Strategy, the corporate Bitcoin holder formerly known as MicroStrategy. Strategy disclosed in a filing with the Securities and Exchange Commission that it had sold a portion of its Bitcoin holdings, a move the plaintiffs argue should have triggered payouts on Polymarket's prediction contract. The exact amount in dispute was not disclosed in the filing.
The case adds to Polymarket's mounting legal challenges. The prediction platform is already fighting a separate lawsuit filed by the National Association of Consumer Advocates in Washington, D.C., which alleged the company engaged in deceptive marketing campaigns targeting college-aged users. That complaint, filed in the Superior Court of the District of Columbia, claims Polymarket obscured the likelihood that bettors would lose and paid content creators to film fake winning bets on test versions of the site. A Polymarket representative did not immediately respond to a request for comment.
The New York lawsuit introduces additional legal uncertainty for Polymarket's operations in the US market. It could deter users from engaging with prediction markets due to payout concerns and may invite further regulatory scrutiny from New York authorities, potentially threatening the platform's volume and credibility.
This article is for informational purposes only and does not constitute investment advice.
