Study: Polymarket's "Informed" Traders Generated $143 Million in Abnormal Profits Since 2024

Odaily Researchers from Columbia Law School and the University of Haifa analyzed most of Polymarket's trading data between 2024 and 2026, finding that over 210,000 suspicious transactions yielded $143 million in profits for "informed" traders. Published this month, this study is the first to estimate the total profit amount of suspicious accounts.

The researchers applied five criteria related to trade timing and bet size to filter out accounts that placed large bullish bets shortly before news announcements. The study defines these activities as "informed" trading rather than "insider" trading, as some of the flagged large trades occurred in markets influenced by numerous factors, such as those related to the 2024 U.S. election. Among the top 20 most suspicious flagged trades, most were linked to the 2024 election results, involving approximately $16 million in profits, with the rest concerning Federal Reserve decisions and sporting events.

Harry Crane, a statistics professor at Rutgers University, questioned the research methodology, arguing that its suspiciousness ranking overly relies on profitability. The study authors acknowledged that the method might include cases inappropriately or miss others, characterizing the identified suspicious trading volume as "a conservative lower-bound estimate of abnormal profits."

Polymarket announced earlier this month a ban on trading using "stolen confidential information" and "illegal tips," but its offshore exchange does not collect user identity information such as names, leaving its enforcement methods unclear.