A select group of crypto wallets raked in over $1.2 million by betting on a Polymarket contract tied to an on-chain investigation into decentralized finance (DeFi) platform Axiom, raising fresh concerns about the potential for insider trading in prediction markets.
According to trading data compiled on Dune, the eight most profitable wallets collectively made about $1.2 million, while more than 50 wallets posted combined losses of roughly $1.23 million. Two wallets alone lost approximately $366,000. On-chain researcher Defioasis noted that eight out of the top 10 wallets are likely insider addresses, based on their transaction patterns. “There are 3 addresses that achieved profits exceeding $100,000, all of which are insider addresses that traded only this single market,” Defioasis stated in an X post.
Background on the Axiom Investigation
The investigation, conducted by on-chain researcher ZachXBT, was released on Thursday and alleged that Axiom employee Broox Bauer and others were involved in insider trading activities since early 2025. Axiom responded to the allegations with a statement expressing shock and disappointment, and the company has since removed access to the tools used for the alleged insider trading.
Insider Trading Concerns in Prediction Markets
Insider trading concerns in prediction markets are not new. In early January, a highly profitable bet on the removal of Venezuelan President Nicholas Maduro by the U.S. raised eyebrows. On January 3, a Polymarket account placed a bet on a contract predicting Maduro’s removal just hours before U.S. forces captured him, netting the user about $400,000 in profit. This incident has added to the growing scrutiny of prediction markets and their potential for abuse.
Regulatory Scrutiny on Polymarket
Polymarket, the largest decentralized prediction market, has faced increasing regulatory pressure. Hungary and Portugal blocked access to the platform in January, citing concerns related to forbidden gambling activities. Ukraine followed suit, classifying Polymarket’s activities as unlicensed gambling under national law. The platform has also been restricted or blocked in several other countries, including France, Belgium, Poland, Singapore, and Switzerland.
Looking Ahead
As prediction markets continue to grow in popularity, the risk of insider trading and regulatory scrutiny will likely remain high. The recent events surrounding Axiom and the Maduro bet highlight the need for stricter oversight and transparency in these markets. Policymakers and industry leaders will need to work together to ensure that prediction markets can operate fairly and without undue influence from insiders.
About the Author
