Cryptocurrency users earned hundreds of thousands of dollars betting on insider trading investigations, allegedly using insider information.
The crypto community is discussing a new twist in the high-profile scandal surrounding the investigation by renowned crypto detective ZachXBT, who accused Axiom platform employees of insider trading. The story took an unexpected turn when a number of unknown users managed to earn hundreds of thousands of dollars, presumably using insider information about the insider investigation.
Axiom is a token trading terminal primarily focused on memecoins. With its help, users can track the activity of specific wallets, analyze on-chain transactions, and quickly make trades. Axiom is not tied to any platform: it aggregates data from various exchanges and projects.
On February 23, ZachXBT announced that on February 26, he would publish the results of an investigation into “one of the most profitable businesses,” which caused a huge stir in the crypto market. The detective's announcement on X garnered over 11.5 million views, and almost immediately, a betting market was created on Polymarket: “Which crypto company will ZachXBT expose for insider trading?” The volume of this market exceeded $38 million.
Axiom was not the favorite: for most of the market's existence, the Meteora exchange led with a share of about 40%. After studying the blockchain data, researchers discovered several wallets that made large and very timely bets on Axiom's victory.
Polysights found five wallets that collectively bet about $50,000 on Axiom, earning $316,000. Researchers from Lookonchain counted 12 potentially insider addresses with a combined income of about $1 million.
The absolute record holder was the predictorxyz wallet. This user bet $65,000 on Axiom at a time when the company's odds were estimated at only 13.8%. ZachXBT later discovered that the wallet owner is active on the Axiom platform, but the trader's identity has not yet been established.
Blockchain analysts note that many of the wallets that profited from these bets were created immediately before the bets and were not active in other markets. This is a classic pattern of insider trading, which is easy to track but difficult to prove given the anonymous nature of cryptocurrencies.
“Did Axiom employees engage in insider trading on the ZachXBT [Polymarket] market?” Polysights asked.
Who could earn money
At this point, both investigations—the initial one against Axiom and the subsequent one against Polymarket players—remain at the level of speculation. But in any case, the situation has raised a lot of questions in the community, where those suspected of insider trading on Polymarket can be divided into two groups:
Those with whom ZachXBT communicated: he himself admitted that prior to publication, he contacted the Axiom team and interviewed some of its employees. Information leaks during this period were “probably inevitable,” he wrote.
Those who were part of the original scheme. If Axiom employees were indeed monitoring traders' wallets, they could have known about ZachXBT's investigation in advance and bet against their own company.
Those with whom ZachXBT communicated: he himself admitted that prior to publication, he contacted the Axiom team and interviewed some of its employees. Information leaks during this period were “probably inevitable,” he wrote.
Those who were part of the original scheme. If Axiom employees were indeed monitoring traders' wallets, they could have known about ZachXBT's investigation in advance and bet against their own company.
The reason for the discussion was the events of early February, when the memecoin launchpad Pump.fun bought the Vyper project, relaunching it under its own Terminal brand, directly competing with Axiom for the professional trader audience.
Some X users suggested that ZachXBT's investigation coincided with the interests of players seeking to strengthen their market positions. The detective himself has not yet commented on these assumptions, and there is no evidence to support the allegations.