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

CoinRank reports that 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 gains from suspicious accounts. The researchers used five criteria related to trade timing and bet size to screen accounts that made large bullish bets within a short period before the news release. The study defines these behaviors as “informed” trading rather than “insider” trading, because some of the flagged large trades took place in markets with many influencing factors, such as those related to the 2024 U.S. election. Among the top 20 most suspicious flagged trades, most were related to the outcome of the 2024 U.S. election, involving about $16 million in profit; the rest involved Federal Reserve decisions and sports events. Harry Crane, a statistics professor at Rutgers University, questioned the study’s methodology, saying that its suspiciousness ranking relies too heavily on profitability. The study’s authors acknowledged that the method may over-include or under-include 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 how it will be enforced remains unclear.