By Alexander Osipovich
Hunter Guo found a bet on Polymarket that looked like a near-guaranteed win. Then the betting platform changed its fine print, and he lost $35,000.
On June 1, the bitcoin-hoarding company Strategy disclosed that it had sold the digital currency during the previous week, sending shock waves through the crypto markets. Guo, a 20-year-old student at Kings College London, saw an opportunity to cash in. With a quirk of Polymarket's rules keeping trading open, he bought thousands of betting contracts which said they would pay off if Strategy sold any bitcoin by May 31. He hoped to buy a Porsche with his winnings.
Then Polymarket released a note to provide "additional context." The platform explained that Strategy's disclosure didn't count because it had come out too late. For Guo to win his bet, news of the bitcoin sale needed to have come out by 11:59 p.m. ET the previous night. The value of Guo's contracts was wiped out within seconds.
"I cried for two days. It's a lot of money," said Guo, a native of China studying digital media and culture in the U.K.
Guo had stumbled on a controversial practice in the fast-growing, loosely regulated business of prediction markets: issuing "clarifications" to betting contracts that are already being traded.
Prediction markets use clarifications to address ambiguities in how contracts will be settled, often when real-world events don't fit neatly into the yes-or-no questions that users are wagering on. Critics say they often amount to changing the rules of a bet, and that it is unfair to do so when money is already at stake.
"When traders cannot rely on the contract terms they think they've agreed to, what remains is not a market, but a rigged casino," said Todd R. Snyder, a managing director at investment bank Piper Sandler and a former New York state gaming commissioner.
Disputed bets also sap confidence in prediction markets, which claim to offer accurate, unbiased forecasts of the likelihood of important future events. With Strategy, crypto investors had been closely tracking the company -- led by bitcoin evangelist Michael Saylor -- to see if it would abandon its previous stance of refusing to sell bitcoin.
Polymarket's handling of the Strategy bets sparked criticism from crypto firms that are otherwise fans of prediction markets. Galaxy Digital called it a "debacle." Polymarket's decision "makes no logical sense," wrote Jeff Dorman, chief investment officer of crypto hedge fund Arca.
"Prediction markets reflect complex, fast-moving real-world events, and clarifications provide guidance to ensure contracts are resolved consistently with their stated terms and intended meaning," a Polymarket spokeswoman said.
Polymarket has a data partnership with Dow Jones, publisher of The Wall Street Journal.
Both Polymarket and its main rival, Kalshi, have been listing hundreds of new betting contracts each month in an effort to maintain buzz and keep users engaged. In the rush to expand their offerings, the platforms have sometimes stumbled by listing novel wagers that result in messy situations. Then they issue clarifications, making controversial calls that determine which customers will get paid out and which ones won't.
In January, after the U.S. military operation to capture Nicolás Maduro, Kalshi allowed its users to bet on the question: "Who will officially lead Venezuela on June 1?" Traders could put money on Delcy Rodríguez, the country's new interim president; on Maduro himself, who was jailed in New York; on various lesser-known Venezuelan politicians; or on some U.S. officials, including President Trump.
For several months, prices showed that most traders believed Rodríguez was the right answer, while a smaller minority favored Maduro, and all others were distant long shots. Then Kalshi issued a clarification on April 15 that upended the market.
If the contracts expired that day, Kalshi said, traders who had bet on Maduro would win, and everyone else would lose. The reason: Venezuelan state institutions still recognized him as the "constitutional president." Maduro contracts surged in value, while Rodríguez contracts crashed.
Aharon Diveroli, an investment professional in Miami, lost money wagering on Rodríguez. He considers Kalshi's clarification absurd. "It's crazy," he said. "What they did is against logic and gaslighting to the extreme."
A Kalshi spokeswoman said: "We rarely need to issue clarifications, but when we do, our sole focus is ensuring that the market remains clear and consistent for all traders."
Kalshi said it clarified the Venezuela contract after users asked how it should be interpreted. Messages on Kalshi's official forum on Discord, the social-media platform, suggest that the clarification was encouraged by traders who spotted the ambiguity and tried to profit from the undervalued Maduro contracts.
"I think I've found a serious mispricing opportunity," a user named lk6969 posted on Discord on March 16.
The next day, lk6969 flagged the ambiguity to a Kalshi team member in the forum, noting the contract's rules for who counted as Venezuela's official leader. "As of right now, it's not clear who would fit these criteria," lk6969 posted.
Kalshi's spokeswoman said that even if a user flags an issue, the platform conducts reviews based purely on its established, pre-existing rules. "Because traders have no way of predicting the outcome of a clarification, they cannot use their own reports to influence market movements for their own benefit," she said.
Earlier this week, the Commodity Futures Trading Commission proposed an expansive new set of rules for prediction-market platforms. It listed "settlement ambiguity" as one potential reason for prohibiting certain betting contracts.
Guo, the student in London, is still furious about losing what he considers a rigged bet.
He has bashed Polymarket in dozens of posts on X, often using the hashtag #StopPolyScam. He has filed complaints with U.S. regulators and law enforcement. He used AI tools to build a website to organize like-minded traders who lost money on the same Strategy betting contract.
Polymarket data show that 1,838 accounts bet a collective $3.8 million that Strategy would sell bitcoin by May 31 before the clarification wiped them out.
Other traders -- including Polymarket veterans steeped in precedents set by previous disputes -- argue the platform made the right call. They note that in the past, Polymarket has declined to consider information released after the cutoff date of a contract. If fresh information trickles in late can be used to resolve bets, they might never be fully settled, these traders argue.
The Strategy betting contracts continued trading the morning of June 1, after the midnight cutoff, because of a feature on the platform that keeps trading open when the outcome of a bet is disputed.
As a relative newcomer to Polymarket, Guo said he didn't know about its arcane procedures for resolving disputes. All he knew was the plain language of how Polymarket described the Strategy bets on its app and website.
"The rule asked whether Strategy sold bitcoin by May 31. Not whether the world discovered it by May 31," he wrote in one tweet. "People arguing otherwise should read the rule again."
Guo has vowed to continue pressuring Polymarket. For now, he doesn't plan to buy a Porsche.
Write to Alexander Osipovich at alexo@wsj.com
(END) Dow Jones Newswires
June 13, 2026 05:30 ET (09:30 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments