A small group of crypto wallets made more than $1.2 million by betting on a Polymarket contract tied to an on‑chain investigation into DeFi trading platform Axiom, raising concerns that prediction markets can reward people with advance knowledge of market‑moving disclosures.
Dune trading data shows the eight most profitable wallets on the market collectively earned about $1.2 million. The same dataset recorded more than 50 wallets losing roughly $1.23 million combined, with two wallets losing about $366,000.
On‑chain researcher Defioasis flagged that eight of the top 10 wallets are likely insider addresses based on transaction patterns. The researcher noted three addresses each achieved profits exceeding $100,000 and traded only this single market.
The bets coincided with the publication of a long‑awaited investigation by analyst ZachXBT, which alleged that Axiom employee Broox Bauer and others engaged in insider trading since early 2025. Axiom said it was “shocked and disappointed” and removed access to the tools implicated in the alleged activity.
The incident adds to broader scrutiny of prediction markets. In early January, a Polymarket account placed a highly profitable bet on the removal of Venezuelan President Nicolás Maduro just hours before U.S. forces captured him, netting about $400,000 and prompting further questions about advance information being used in markets. U.S. lawmakers have proposed legislation to restrict political prediction market trading by government officials amid those concerns.
Polymarket, the largest decentralized prediction market, has also faced regulatory pressure over gambling concerns. Hungary and Portugal blocked access to the platform in January for allegedly offering forbidden gambling activities, and Ukraine classified Polymarket as unlicensed gambling and blocked it shortly before. Other countries that have restricted or blocked the platform include France, Belgium, Poland, Singapore and Switzerland.
The episode underscores tensions between decentralized prediction markets’ information discovery function and the risk that insiders or those with privileged access can profit from nonpublic information, prompting calls for greater oversight and platform controls.
