Polymarket Faces Backlash Over Controversial Outcome on $13M Ethereum ETF Bet

Polymarket, a decentralized betting platform, is under scrutiny for its handling of a $13.2 million wager regarding the approval of spot Ether exchange-traded funds (ETFs). Users who bet against the approval are contesting the platform's decision to close the market with a "Yes" outcome, alleging that the bet is still unresolved.

The betting market, hosted on the blockchain platform, concluded with a "Yes" result on May 23, following the SEC's approval of the 19b-4 filings for multiple Ether ETFs. However, disputes arose regarding the definition of "approved," with some users arguing that without the Form S-1 filing, the ETFs cannot be considered approved.

"No" voters contend that true approval necessitates both the 19b-4 and Form S-1 filings approved by the SEC. They express frustration over the decision, particularly as they anticipated a delay in the SEC's approval of the S-1 filings.

Prominent “No” bidder “JustKen” — whochangedtheir name to “RevengeTour19B4” after the saga — pointed toVanEck digital assetsresearch head Matthew Sigel’s X post that said “ETFs are not considered ‘approved’” until both the S-1 and “19b-4 filing have been signed off on by the SEC.”

While some argue that the market explicitly specified "approval," not commencement of trading by May 31, others point to industry experts who assert that true approval requires both filings to be signed off by the SEC.

Despite the discontent among users, there has been no immediate response from Risk Labs, the company behind UMA, which handles information disputes on Polymarket. Similarly, Adventure One QSS Inc., the development firm of Polymarket, has not addressed the situation.

The controversy surrounding Polymarket's handling of the Ethereum ETF bet highlights the complexities of decentralized betting platforms and the challenges of defining outcomes in ambiguous circumstances. As users express dissatisfaction with the platform's decision, the situation underscores the importance of clear guidelines and transparent processes in such platforms.