Suspected Insider Wallets Net $1.2 million on Polymarket’s Axiom Exposé Bet
February 27 2026 – CoinDesk
A handful of crypto wallets scooped more than $1.2 million in profit by betting on a Polymarket contract that was tied to a high‑profile on‑chain investigation of DeFi platform Axiom. The data, compiled from Dune analytics, reignites concerns that prediction‑market participants can exploit advance knowledge of market‑moving disclosures.
What happened
- The contract: Polymarket listed a binary market that asked whether an upcoming investigation, published by prominent on‑chain analyst ZachXBT, would confirm insider‑trading activity at Axiom.
- The profit: The ten most successful wallets earned a collective $1.2 million, with three addresses alone posting gains exceeding $100 k each.
- The losers: More than 50 wallets posted combined losses of roughly $1.23 million, and two other addresses lost about $366 k, underscoring the high‑risk nature of the trade.
On‑chain researcher known as Defioasis flagged eight of the top ten wallets as “likely insider addresses” based on transaction timing, concentration in a single market, and lack of activity elsewhere. The researcher highlighted the three wallets that each made over $100 k, noting that they only placed bets on this particular Polymarket contract.
The underlying investigation
ZachXBT released a detailed report on Thursday alleging that Axiom employee Broox Bauer and several colleagues had engaged in insider trading since early 2025. The report cites internal communications and blockchain data suggesting that privileged information about upcoming protocol changes was funneled into private trades before being made public.
Axiom responded on X (formerly Twitter) that it was “shocked and disappointed” by the allegations and that it had immediately revoked access to the tools used for the purported misconduct. The exchange has not disclosed any further disciplinary actions.
A broader pattern of insider‑trading concerns
The Axiom episode follows a series of high‑visibility incidents that have put prediction markets under the microscope:
| Date | Event | Profit |
|---|---|---|
| Jan 3 2026 | Polymarket bet on the removal of Venezuelan President Nicolás Maduro hours before a U.S. operation | ≈ $400 k |
| Feb 27 2026 | Axiom expose bet | ≈ $1.2 M (top ten wallets) |
U.S. lawmakers have already introduced legislation aimed at restricting political prediction‑market activity by elected officials, a move spurred in part by the Maduro case. The rapid succession of insider‑trading allegations suggests that the problem may be more systemic than previously thought.
Regulatory pressure on Polymarket
Polymarket, the largest decentralized prediction‑market platform, is facing mounting scrutiny from regulators worldwide:
- Europe: Hungary and Portugal blocked access in January, citing unlicensed gambling.
- Eastern Europe: Ukraine classified Polymarket’s offerings as illegal gambling and blocked the service.
- Other jurisdictions: France, Belgium, Poland, Singapore and Switzerland have issued restrictions or warnings.
The combination of alleged insider trading and gambling‑related regulatory actions could prompt tighter oversight of decentralized prediction markets, especially those hosting on‑chain investigations that may be vulnerable to information leakage.
Analysis
- Information asymmetry risk – The Axiom bet illustrates how participants with privileged on‑chain data can capture outsized returns, potentially undermining the perceived fairness of prediction markets.
- On‑chain forensic tools – Researchers like Defioasis demonstrate that blockchain analytics can surface suspicious patterns, but enforcement remains a challenge in a permissionless environment.
- Regulatory implications – Authorities may extend existing gambling frameworks to cover insider‑trading risks, creating a dual compliance burden for platforms that operate across borders.
- Market impact – Repeated high‑profile profit spikes could erode user confidence, leading to reduced liquidity and participation on decentralized markets.
Key Takeaways
- Insider wallets earned $1.2 M on a single Polymarket contract linked to ZachXBT’s Axiom investigation.
- On‑chain analysis flags eight of the top ten wallets as likely insiders, based on concentrated trading behavior.
- Losses outpace gains for the broader user base, with more than 50 wallets collectively losing over $1.2 M.
- Regulators are watching: Recent legislative proposals and country‑specific bans signal growing scrutiny of prediction‑market platforms.
- Future monitoring needed: Enhanced analytics and possibly on‑chain identity solutions may be required to deter insider trading in decentralized markets.
As the crypto ecosystem grapples with the intersection of transparent ledger data and opaque insider information, the Axiom case could serve as a catalyst for both industry self‑regulation and formal legal frameworks. Stakeholders will be watching closely to see whether prediction markets can adapt without compromising the open‑access ethos that defines them.
Source: https://cointelegraph.com/news/suspected-insider-1-2m-zachxbt-axiom-expose?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
