Polymarket Bettors Insider Traded on a Market to Catch Them

What to Know

$1 million — At least 12 wallets profited by insider trading on a Polymarket contract tied to a ZachXBT investigation into Axiom
$40 million — Total volume on the Polymarket wager asking which company ZachXBT would name as the insider-trading culprit
477,415 shares — The top holder bought at $0.14 each and is sitting on $411,000 in profit, a roughly 7x return
Polymarket's offshore structure lacks identity checks, making it nearly impossible to attribute suspicious wallets without exchange cooperation

Polymarket bettors appear to have insider traded on a prediction market contract built to expose insider traders, on-chain data published Thursday reveals. Blockchain investigator ZachXBT named Axiom, a crypto trading platform, as the firm whose employees allegedly leveraged non-public information for profitable trades. A handful of wallets that bet on Axiom before the reveal netted combined profits exceeding $1 million.

ZachXBT Investigation Sparks Polymarket Insider Trading

The investigation had been teased for days, and Polymarket launched a dedicated contract letting users wager on which company ZachXBT would name. That contract attracted roughly $40 million in volume since Monday, according to on-chain data. For most of the week, a rival platform called Meteora led the market as frontrunner at odds exceeding 50%. The probabilities swung sharply toward Axiom late on Wednesday, peaking at 46.2% before the official reveal.

Anyone purchasing Axiom shares in the window between that shift and ZachXBT's Thursday morning publication was either reading the situation with unusual precision or already knew the outcome.

How Did Polymarket Wallets Profit From Insider Knowledge?

A small cluster of wallets dominated the winning side of the Axiom contract. Lookonchain identified 12 wallets that placed heavy bets prior to the reveal, collectively earning more than $1 million. Separately, Polysights flagged five wallets that wagered roughly $50,000 and walked away with $266,000.

The largest holder, an account called predictorxyz, accumulated 477,415 shares at an average cost of $0.14 and is sitting on approximately $411,000 in profit — a roughly 7x return. The second-largest holder, an anonymous wallet, acquired 109,450 shares at $0.33 each. This was not broad informed speculation; a handful of accounts dominated the Axiom side of the book.

Leaks Were Probably Inevitable

ZachXBT acknowledged on social media that he had contacted Axiom for comment and conducted several interviews before publishing, conceding that a leak was "probably inevitable." Multiple people at the company knew the report was coming before it went live. Any of them could have placed bets directly or tipped someone who did.

Polymarket's offshore platform does not conduct identity checks, making it extremely difficult to trace suspicious wallets back to individuals without cooperation from the exchange itself.

We are shocked and disappointed by the findings and will continue to investigate.
— Axiom, in a public statement

What Does This Mean for Prediction Markets?

The structural irony is that the mechanism worked exactly as designed — it simply rewarded the subjects of the investigation rather than those conducting it. The contract aggregated information and moved probabilities toward the correct answer, but profits flowed to those with non-public knowledge.

Axiom said it was "shocked and disappointed" and pledged to continue its internal review. The company did not address whether employees traded on the Polymarket wager. Without identity checks or regulatory oversight on the offshore platform, accountability remains elusive — underscoring a fundamental tension in decentralized prediction markets between ledger transparency and participant anonymity.