Insiders Netted Over $1M from ZachXBT Investigation Bets on Polymarket

On-chain researcher defioasis.eth has uncovered widespread insider activity on Polymarket related to ZachXBT's investigation — eight of the ten most profitable addresses show clear signs of trading on non-public information, with combined earnings exceeding $1.2 million.

How Insiders Profited from ZachXBT Investigation Bets

According to defioasis.eth, 3,630 addresses placed bets on Axiom within the Polymarket market tied to ZachXBT's investigation. Of those, 56.2% ended up in profit.

"一共有超过 3,630 个 Polymarket 地址在 ZachXBT 内幕调查事件中押注'Axiom'，其中 56.2% 的地址获得正向盈利…" — defioasis.eth (@defioasis), original post

The detailed breakdown reveals:

• Profitable positions: 47 users earned between $10,000 and $100,000, with total gains of $1.34 million;
• Major losses: two participants lost over $100,000 each — $366,000 combined;
• Medium losses: 50 addresses lost between $10,000 and $100,000, totaling $1.239 million.

The defining characteristic of the eight suspicious addresses among the top 10 earners is their extremely thin trading history — some placed just a single bet ever.

Analytics platform Lookonchain independently reached similar conclusions, publishing a list of 12 suspicious wallets with combined profits of $1.02 million.

"We found that many insiders made big profits by betting on which crypto company @zachxbt would expose for insider trading. Here are 12 suspected insider wallets we identified. Together, they made a total profit of $1.02M!" — Lookonchain (@lookonchain), original post

The Biggest Winner and the Axiom Trail

Three wallets earned over $100,000, and all of them traded exclusively on the ZachXBT-related market. The top earner was the address predictorxyz, which netted $411,600. According to Lookonchain, this trader deposited $65,000 when Axiom's odds stood at just 13.8%.

ZachXBT flagged a suspicious $70,000 USDC deposit into a newly created account and launched his own probe.

"I investigated the source of funds for 'predictorxyz' as I agree $70K USDC funded on a newly created prediction markets account is suspicious. I used timing analysis and traced it back through instant exchanges to the following Solana address…" — ZachXBT (@zachxbt), original post

By tracing fund flows, the on-chain detective determined that predictorxyz operates on the Axiom platform under the alias JustADegen. The real identity behind the account remains unknown.

Kalshi: 200 Investigations and Two High-Profile Cases

Prediction market platform Kalshi disclosed that it is conducting approximately 200 investigations into insider trading. CEO Tarek Mansour shared details on two recently closed cases.

"Today, we are releasing information about two insider cases we recently closed. Thank you @robertjdenault and team for leading the investigation and working with law enforcement." — Tarek Mansour (@mansourtarek_), original post

The first case involves Kyle Langford, a former Republican candidate for governor of California who has since switched to the Democratic Party and is now running for the U.S. House of Representatives from California's 26th district. Langford bet $200 on his own election victory and posted a screenshot on X.

"I just bet $100 💵 that I, Kyle Langford will be the next Governor of California, join me (if you believe 🙏🏻) 😎 @Kalshi" — Kyle Langford (@KyleLangfordCA), original post

In May, he also posted a video of a $98.76 bet on his own victory. The result: a five-year ban from Kalshi and a $2,000 fine. No profits were withdrawn from the account.

The second individual is Artem Kaptur, a YouTube editor who worked with James Donaldson (MrBeast). Between August and September 2025, Kaptur placed trades worth approximately $4,000 on markets tied to outcomes of the Beast Games reality show. He received a two-year ban and a fine of roughly $20,000. According to CoinDesk, Kaptur was also suspended from his role at Beast Industries.

Information on both incidents was forwarded to the Commodity Futures Trading Commission (CFTC).

Why This Matters

Prediction markets are growing rapidly, but the surge in volume is amplifying the problem of insider trading. The CFTC's response signals a tightening regulatory stance toward this sector.

The CFTC confirmed the validity of Kalshi's sanctions and reserved the right to conduct its own investigations. Both cases, according to the regulator, may violate U.S. law.

Commission Chairman Michael Selig announced the creation of a dedicated advisory council for prediction markets, tasked with detecting illegal trading in close collaboration with industry participants. Selig warned that any attempts at manipulation, fraud, or insider trading will be uncovered and prosecuted.

Earlier, Ethereum co-founder Vitalik Buterin had raised concerns about prediction markets potentially devolving into gambling venues.