According to Odaily, researchers from Columbia Law School and the University of Haifa analyzed a large portion of Polymarket's trading data between 2024 and 2026 and found that over 210,000 suspicious transactions generated $143 million in profits for "informed" traders. Odaily this month, the study is the first to estimate the total profits of suspicious accounts.
Researchers used five criteria related to trading timing and bet amount to screen accounts that made large bullish bets shortly before news releases. The study defined these actions as "informed" trading rather than "insider" trading because some of the flagged large trades occurred in markets with numerous influencing factors, such as those related to the 2024 US election. Most of the top 20 most suspicious trades flagged were related to the 2024 election results, involving approximately $16 million in profits; the remainder involved Federal Reserve decisions and sporting events.
Harry Crane, a statistics professor at Rutgers University, questioned the research methodology, arguing that its suspiciousness ranking relied too heavily on profitability. The study authors acknowledged that the methodology could potentially over- or under-include certain transactions and characterized the identified suspicious transaction volumes as "conservative lower bound estimates of anomalous profits."
Polymarket announced earlier this month that it would ban trading using "stolen confidential information" and "illegal tips," but the method of enforcement remains unclear as its offshore exchange does not collect user names or other identifying information.
