Cluster of wallets profit from prediction market tied to onchain investigation

A group of crypto wallets generated more than $1.2 million in profit by betting on a Polymarket contract linked to blockchain investigator ZachXBT’s report on DeFi trading platform Axiom, prompting renewed scrutiny over insider activity on decentralized prediction markets.

Data compiled on Dune shows that the eight most profitable wallets on the contract collectively netted around $1.2 million. In contrast, more than 50 wallets recorded combined losses of roughly $1.23 million, with two addresses alone losing approximately $366,000.

Related reporting: Nevada sues Kalshi after appeals court clears path for state action over sports prediction markets

Onchain researcher Defioasis flagged unusual transaction patterns among the top earners. According to the researcher, eight of the top 10 wallets displayed behavior consistent with insider positioning, including several that traded exclusively on this single market.

“Three addresses made over $100,000 each and traded only this contract,” Defioasis wrote on X, suggesting the possibility of advance knowledge about the timing or substance of the investigation.

ZachXBT’s report, released Thursday, alleged that Axiom employee Broox Bauer and others were involved in insider trading activity dating back to early 2025. In response, Axiom said it was “shocked and disappointed” and confirmed it had revoked access to the tools allegedly used in the misconduct.

Top wallets betting on Axiom in ZachXBT’s insider exposé. Source: Dune

Prediction markets under renewed insider scrutiny

The episode has intensified concerns about how prediction markets handle sensitive, market-moving information.

Unlike traditional exchanges, decentralized prediction platforms allow users to wager on future events — including regulatory actions, corporate announcements or investigative disclosures — without the same oversight frameworks that govern securities markets.

Questions around insider trading in such markets are not new. In January, a Polymarket account reportedly placed a large bet predicting the removal of Venezuelan President Nicolás Maduro shortly before US forces detained him. The user is estimated to have earned around $400,000 from the wager.

That case drew political attention in Washington, where lawmakers have proposed tighter rules restricting government officials’ participation in political prediction markets.

Regulatory pressure builds globally

Polymarket, currently the largest decentralized prediction market platform, is also facing mounting regulatory challenges abroad.

Several European countries, including Hungary and Portugal, blocked access to the platform in January over concerns that its contracts amount to unlicensed gambling. Ukraine followed with its own restrictions, citing violations of national gambling laws.

Other jurisdictions — including France, Belgium, Poland, Singapore and Switzerland — have similarly moved to restrict or block the platform.

As decentralized betting markets grow in popularity, regulators are increasingly grappling with the blurred lines between financial speculation, gambling and potential insider activity.