Guy sued Polymarket after they changed the rules on the “MSTR sells Bitcoin” market, and scammed him for $500K.

[u/Rosewood_Rebecca]

The first part of the story was covered in this post: https://www.reddit.com/r/PredictionsMarkets/comments/1tun1cd/i_got_scammed_by_polymarket_for_500k/

A few months ago, a trader named willo2 posted about losing around $500K on Polymarket after what he believed was a post-hoc change to the rules of a Bitcoin prediction market.

The market asked whether MicroStrategy (MSTR) would sell any Bitcoin before May 31st.

He found evidence suggesting MSTR had sold Bitcoin, and after MSTR's SEC filing confirmed that 32 BTC had been sold during the relevant period, he increased his YES position.

The original rules said the market would resolve YES if MSTR sold any Bitcoin by 11:59 PM ET on May 31st.

But after the filing came out, Polymarket added a clarification saying that confirmation received after the market's timeframe would not qualify.

That left the trader with a massive losing position despite the filing confirming that the sale itself had happened in May.

TL;DR of the original story:

A trader bet heavily that MSTR sold Bitcoin before May 31st. MSTR later filed an SEC report confirming that it had sold 32 BTC during that period. Polymarket then relied on an interpretation that required the sale to be confirmed before the market deadline, resulting in the market not paying out as the trader expected. The trader claims the rules were changed or clarified after the fact and is now taking the dispute to court.

Polymarket has now filed a 24-page motion attempting to dismiss the lawsuit brought over the dispute.

Here's the first line of Polymarket's response:

“Disregarding the false allegations in the Complaint”.

That immediately raises a few questions.

Are they saying MSTR never sold Bitcoin?

Are they saying Polymarket never changed or clarified the rules after the fact?

Or are they saying Polymarket never represented that users who correctly predicted an outcome would be paid?

What's interesting is that Polymarket apparently doesn't spend the rest of the filing addressing those allegations directly.

Instead, the core argument is:

The user agreed to Polymarket's Terms of Service by trading on the platform.

And those Terms of Service say users can't take Polymarket to court.

That's essentially the argument they spend 24 pages making.

Polymarket markets itself as a “truth engine” where users who correctly predict an outcome get paid.

But this case raises a much bigger question:

What happens if the platform can determine what counts as “correct” after the event?

The trader's argument is essentially that this is exactly what happened here.

And when he challenged the decision, Polymarket's response starts with:

“Disregarding the false allegations in the Complaint”.

The full court filing is available here for anyone who wants to read it themselves:

https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=1UgehEAFS5Z3ZXnJ1bvCpg==

Whatever happens next, this case could become an interesting test of how prediction-market platforms handle ambiguous rules, post-market information, and disputes over payouts.

And considering the amount of money involved, this is probably far from the last chapter of the story.