Strategy’s recent bitcoin sale, its first in over three years, sparked a major dispute on Polymarket, with the dispute resolution body run by UMA token holders ultimately ruling against punters who bet the sale would occur before May 31.
The controversy began after Strategy revealed in a June 1 filing that it had sold 32 bitcoins between May 26 and 31. Traders who bought Yes in the May market argued that the company had clearly sold bitcoin before the deadline. Others responded that the transaction was not made public until June 1 and therefore should not count toward the May 31 deadline.
Holders of UMA tokens, which serve as a dispute resolution layer for Polymarket’s oracle system, decisively aligned themselves with the latter point of view.
The resolution means that bettors who bet that Strategy would sell bitcoin before May 31 lost even though the company later revealed that the sale occurred during the last week of May. The June contract, for its part, resolved Yes because the transaction was made public during June.
The result was driven by a handful of large token holders, undermining the core promise of decentralized finance where governance is democratized and not run by a few whales.
The largest vote came from borntoolate.eth, which cast 3.11 million votes for No. Other major votes against included UMA contributor Kevin Chan with 1.53 million votes and several wallets cast more than 1 million each. Together, the four biggest No voters controlled almost 7 million votes, more than 25 times the Yes total.
Several wallets identified as affiliated with Risk Labs, the company behind UMA, also voted No, along with other prominent participants in the UMA ecosystem.
Not everyone is happy with the resolution. Galaxy Research, which had significant exposure to the May contract, strongly rejected X. The firm emphasized that Strategy explicitly sold the 32 Bitcoin between May 26 and 31, and that market resolution criteria should focus on when the sale occurred, not when it was publicly announced on June 1.
“Strategy’s SEC Form 8k filing explicitly stated that Strategy was sold between May 26 and May 31. A plain reading of the resolution criteria would suggest that the market should have resolved YES, hence the controversy,” the firm said.
