Polymarket gets backlash over ‘approved’ outcome on $13M Ethereum ETF bet

A multi-million bet on “Ethereum ETF approved by May 31” resolved to a “Yes” on Polymarket as news from the SEC broke, but the losing side argues it’s not over yet.

Polymarket users who lost money by betting against the approval of spot Ether (ETH) exchange-traded funds (ETFs) are crying foul toward the decentralized betting platform, arguing the bet is still on. 

One betting market on the blockchain platform saw over $13.2 million worth of bets placed on whether an Ether ETF would be approved by May 31 — but it didn’t exactly detail what “approved” meant.

The market closed at a “Yes” result on May 23, after the Securities and Exchange Commission greenlit the 19b-4 filings for multiple Ether ETFs. Polymarket’s logs show the result was briefly disputed but ultimately resolved with the same “Yes” outcome.

But “No” voters argue the call is incorrect, saying a United States ETF needs an approved 19b-4 filing and Form S-1 to start trading on an exchange, and without the S-1 filing, there can’t be a “Yes” result.

Analysts say it could be months before the SEC approves the S-1s, which some “No” voters may have banked their money on.

Prominent “No” bidder “JustKen” — who changed their name to “RevengeTour19B4” after the saga — pointed to VanEck digital assets research 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.”

The unhappy punters also pointed to Bitwise investment chief Matt Hougan telling the Unchained podcast that ETFs are a “nuclear key scenario” where an issuer has “to turn” the 19b-4 and S-1 for approval.

Meanwhile, some in the winning “Yes” camp claimed that the market specified “approval,” not that the ETFs had to start trading by May 31.

Related: SEC’s ETF decision means ETH and ’a lot’ of other tokens are not securities

Others argue the SEC’s 19b-4 approvals are counted as final approval, claiming that Form S-1 approvals typically always follow.

Risk Labs, the company behind UMA, a blockchain oracle platform that provides a forum for handling information disputes on Polymarket, did not immediately respond to a request for comment on the situation.

Polymarket’s development firm, Adventure One QSS Inc., did not immediately respond to a request for comment.