Insider Trading Allegations Mar Polymarket's Investigation into Insider Trading

Polymarket's platform has been designed to detect and prevent insider trading, but it appears that its mechanism was exploited by insiders who made significant profits from their trades.

The investigation into alleged insider trading, led by blockchain sleuth ZachXBT, identified Axiom as the company whose employees had used non-public information to place profitable trades. The findings were publicly revealed on Thursday morning, but at least 12 wallets collectively made over $1 million betting on the outcome of the investigation before it went public.

The largest Yes holder on the Axiom market accumulated 477,415 shares at an average price of $0.14 and is now sitting on $411,000 in profit, a roughly 7x return on their bet. This is not an isolated incident, as multiple wallets dominated the Axiom side of the book, making it difficult to attribute the trades without cooperation from the exchange itself.