Polymarket bet sparks insider trading questions

Trading data summarized from a Dune dashboard showed the eight most profitable wallets on the contract collectively made about $1.2 million, while more than 50 wallets logged roughly $1.23 million in combined losses, indicating the market’s payouts were concentrated in a handful of addresses.

An on-chain researcher who reviewed the wallet activity said eight of the top 10 profit-making addresses appeared likely to be insider wallets based on transaction patterns, including several addresses that traded only this single market and still generated six-figure gains.

The trading burst centered on a contract asking which crypto company ZachXBT would expose for insider trading, where Axiom moved to 100% as the report neared publication. ZachXBT released the investigation on Feb. 26, alleging that an Axiom employee, Broox Bauer, and others were involved in insider trading activity dating back to early 2025 by using internal tools to track private wallet activity.

Axiom responded publicly after the allegations, saying it was “shocked and disappointed” and that it had removed access to the tools that were allegedly used to facilitate the activity described in the investigation.

The episode added to a growing debate about how to police “informational edge” trading on prediction markets, where contracts can move sharply on rumors, leaked documents, or knowledge of impending reports. Earlier scrutiny around the sector has focused on unusually well-timed bets on political and geopolitical outcomes, prompting calls for clearer rules on who can trade certain contracts and what constitutes improper use of non-public information.

At the same time, Polymarket has been facing widening regulatory pressure in multiple jurisdictions over gambling classifications and licensing issues. In Ukraine, authorities blocked access to the platform in January after concluding the service amounted to unlicensed gambling, adding to a patchwork of restrictions in other countries.

For now, the Axiom-related contract is being cited by analysts as a case study in how prediction markets can concentrate gains among a small number of traders when a single narrative becomes dominant, while leaving a longer tail of participants with losses. The on-chain records behind those gains are public, but identifying whether the most profitable wallets belonged to insiders, sophisticated researchers, or opportunistic traders remains unresolved without additional evidence beyond trading patterns and timing.