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

Odaily Planet Daily News reports that researchers from Columbia Law School and the University of Haifa analyzed most of the trading data on Polymarket from 2024 to 2026, finding that over 210,000 suspicious trades brought “informed” traders $143 million in profits. This study, published this month, is the first to estimate the total profit amount from suspicious accounts.

The researchers developed five criteria related to the timing of trades and bet amounts to filter accounts that made large bullish bets shortly before news releases. The study defines these actions as “informed” trading rather than “insider” trading, since some of the flagged large trades occurred in markets with many influencing factors, such as those related to the 2024 U.S. presidential election. Among the top 20 most suspicious trades flagged, most were related to the outcome of the 2024 election, involving approximately $16 million in profit, while the rest were related to Federal Reserve decisions and sporting events.

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

Polymarket announced earlier this month that it would prohibit trading based on “stolen confidential information” and “illegal tips,” but its offshore exchange does not collect user names or other identifying information, and the enforcement method remains unclear.