Research: Polymarket "Informed" Traders Earned $143 Million in Abnormal Profits Since 2024

Odaily Planet Daily News: Researchers from Columbia Law School and the University of Haifa analyzed most of Polymarket’s trading data from 2024 to 2026 and found that more than 210,000 suspicious trades generated $143 million in profits for “informed” traders. The study was published this month and is the first to estimate the total amount of profit earned by suspicious accounts.

The researchers used five criteria related to trade timing and bet size to filter out accounts that placed large bullish bets within a short time before news releases. The study defined these behaviors as “informed” trading rather than “insider” trading because some of the flagged large trades occurred in markets with many influencing factors, such as those related to the 2024 U.S. election. Among the top 20 flagged most suspicious trades, most were related to the outcome of the 2024 U.S. election, involving about $16 million in profit, while the rest involved Federal Reserve decisions and sports events.

Harry Crane, a statistics professor at Rutgers University, questioned the study’s methodology, arguing that its ranking of suspiciousness relies too heavily on profitability. The study’s authors acknowledged that the method may have over- or under-included certain cases and characterized the volume of suspicious trades they identified as a “conservative lower bound estimate” of “abnormal profits.”

Polymarket announced earlier this month that it would ban trading using “stolen confidential information” and “illegal tips,” but its offshore exchange does not collect identity information such as users’ names, and its enforcement is still unclear.