A teaser sparks $27 million in bets: ZachXBT investigates insider trading and market trends behind the event

On February 26, 2026, pseudonymous on-chain investigator ZachXBT released a report on insider trading involving the cryptocurrency exchange Axiom as scheduled, accusing multiple employees of abusing internal tools to track user wallets and profit. This report put an end to the speculation frenzy that had swept the crypto community over the past 72 hours. However, what truly shook the industry was not just the investigation itself, but a prediction market game involving over $27 million centered around the “investigation preview.”

From teaser to revelation, ZachXBT’s move has evolved from mere on-chain crime tracking into a key indicator of market sentiment, information flow, and new forms of strategic play.

Overview of the Axiom Investigation

On February 26, ZachXBT published a report accusing several employees of Axiom Exchange of suspected insider trading using internal tools. Founded in 2024, Axiom was selected for Y Combinator’s Winter 2025 batch and has generated over $390 million in revenue so far.

The report states that Broox Bauer, a senior business development staff at Axiom, along with others, allegedly used internal customer service permissions to access sensitive information such as private wallet addresses and full transaction histories. In a leaked recording, Bauer claimed he could track any Axiom user via referral codes, wallet addresses, or user IDs, describing a gradual investigation process to avoid suspicion. ZachXBT also accused employees of leaking data to compile a “private wallet list of crypto influencers” and plotting to profit from inside information.

Axiom responded by saying they were “shocked and disappointed,” removing access to relevant tools and promising to continue investigating and hold violators accountable.

Background and Timeline

The development of this event shows a clear, tightly linked causal chain, with key moments as follows:

• Feb 23 (teaser and speculation start): ZachXBT posted a teaser on X, announcing an upcoming major investigation on one of the “most profitable companies” in crypto, involving multiple employees allegedly trading on inside info. Decentralized prediction platform Polymarket quickly launched a prediction market asking “Which company will ZachXBT expose?” Early guesses focused on projects with political backgrounds like World Liberty Financial.

• Feb 24 (data shifts and focus shifts): Betting volume around the target surged, approaching $3 million. Solana ecosystem liquidity platform Meteora initially led with about 43% probability, followed by Axiom and Pump.fun with 13% and 12%. On the same day, two time-related trades appeared: a new address bet about $6,000 on Meteora on Polymarket, then another opened a short position on the MET token on Hyperliquid, sparking widespread speculation about “using prediction markets for insider trading.” ZachXBT responded that, due to multiple involved parties, information leakage was “probably unavoidable.”

• Feb 25 (response and clarification): Meteora co-founder clarified that the team takes insider trading risks seriously and that their permissionless platform means the team usually learns about issues only after the fact. Further on-chain checks showed no evidence linking the two trades, and the short position ultimately lost money, widely seen as a coincidence rather than manipulation.

• Feb 26 (report release): ZachXBT officially published the investigation, targeting Axiom. The prediction market on Polymarket accumulated over $27 million in trading volume.

Data and Structural Analysis

The data fluctuations in this event reveal the dual nature of prediction markets in information battles.

Volume and probability shifts: Before the report, the Polymarket contract asking “Which crypto company involved in insider trading will ZachXBT expose?” had a total trading volume of $27.6 million. Probabilities fluctuated sharply over 48 hours: Meteora at one point led with over 40%, but as the release approached, Axiom’s probability surged, ultimately becoming the leading choice just before publication. This distribution reflects collective guesses from thousands of participants based on public info, historical investigation styles, and social cues, rather than concrete evidence.

Low-cost impact on high-market-cap illusions: The widely discussed case of a $6,000 bet moving a $200 million market cap illustrates the new risks of prediction market manipulation. Though likely a mistake, it sketches a clear template: limited liquidity in order books means a few thousand dollars in bets can significantly sway the probability of an option. Such price movements can serve as signals for manipulators to profit via high leverage in related perpetual contracts, creating cross-market effects between prediction markets and spot/derivative markets.

Insider info and prediction market arbitrage: More noteworthy are on-chain traces after the report. Lookonchain tracked a trader who, betting when odds were low, invested $65,800 on Axiom being exposed and made $410,000 profit. Further investigation linked this account’s funds to active Axiom users, strengthening suspicion of insiders exploiting informational advantages for arbitrage.

Public Opinion Breakdown

Public discourse around this event shows multi-layered debates:

Superficial controversy: Does the investigation teaser create new insider trading opportunities? Commentator Bold sharply pointed out that the “cleverness” of ZachXBT’s teaser is that, once the target learns they are under investigation, they might exploit information asymmetry to pre-position in prediction markets. This creates a paradoxical loop where “investigation” itself could trigger insider trading. ZachXBT admitted that, due to multiple involved parties, information leakage was “probably unavoidable.”

Deeper concerns: Prediction markets becoming tools for emotional manipulation. The mainstream view isn’t just condemning potential insider trading but worries that platforms meant to reveal truth through financial incentives are evolving into low-cost tools for market sentiment manipulation. Unlike traditional insider trading, which at least reveals some facts early, pure “fundamental influence” manipulation is more brazen. As long as manipulators can sway prediction odds, they can indirectly influence asset prices.

ZachXBT’s stance and reflection: ZachXBT stated he didn’t expect the teaser to go viral with over 8.5 million views, and that the importance of prediction markets was far less before. His response indicates that his teaser was a continuation of past experience, but the scale of dissemination and the evolution of market structure (rise of prediction markets) have caused unforeseen side effects.

Authenticity of the Narrative

Based on distinguishing facts, opinions, and speculation, here’s an assessment:

• Facts: ZachXBT released the teaser and exposed Axiom; Polymarket launched the related prediction market with over $27 million traded; a trader profited $410,000 betting on Axiom being exposed, with on-chain links to Axiom users; ZachXBT acknowledged information leakage as “probably unavoidable.”
• Opinions: The dominant view is that the “$6,000 bet” incident was a form of manipulation—an “inside job” exploiting prediction markets. This narrative shapes the negative framing of the event.
• Speculation/Verification: On-chain analysis later discredited the main argument of the “$6,000 bet” story. The two trades lacked on-chain links, and the short position ended in loss. The more cautious conclusion is that it was a time coincidence misinterpreted as manipulation. However, the existence of the $410,000 profit case provides more convincing evidence of insiders exploiting informational advantages.

Industry Impact Analysis

Although the investigation details are now public, the “teaser” itself and its chain reactions have already had tangible effects on the industry:

Impact on on-chain investigators: The event forces influential figures like ZachXBT to reassess their workflows. The rhythm, scope, and methods of information disclosure have become market variables. Future investigators may need to balance “transparency” with “avoiding market manipulation.”

Impact on prediction markets: Platforms like Polymarket, whose core value is “using money to reveal truth,” face risks of being turned into “truth gambling casinos.” If insiders exploit informational advantages for arbitrage and mechanisms aren’t improved (e.g., deeper liquidity, more complex info verification), prediction markets could face stricter regulation and trust issues.

Impact on market participants: Participants will become more sensitive to “second-order effects.” Any high-profile event can trigger derivative bets around its prediction market. Participants need more sophisticated frameworks to distinguish “the event itself” from “the strategic bets around it,” managing layered risks.

Possible Future Scenarios

Based on current trends, several future developments can be envisioned:

Scenario 1 (Baseline): Investigation prompts industry self-examination. Confirmed insider trading at Axiom leads to tighter internal controls and data privacy measures across platforms. Trust in affected projects is tested, but overall compliance awareness increases.

Scenario 2 (Risk escalation): Prediction market manipulation becomes routine. As cases like the $410,000 profit are confirmed, more imitators emerge. Major events (project announcements, regulatory statements, celebrity comments) could be exploited for arbitrage, worsening information asymmetry and raising regulatory scrutiny.

Scenario 3 (Extreme): Emergence of “teaser—bet—manipulation” attack vectors. Malicious actors might mimic investigation teasers, releasing vague major news expectations while betting on related assets and prediction markets, exploiting market panic or FOMO. This would make the ecosystem more complex and unpredictable, raising questions about social responsibility in information dissemination.