Research: Polymarket "informed" traders gained $143 million in abnormal profits since 2024

Odaily reported that researchers from Columbia Law School and the University of Haifa analyzed most of the Polymarket trading data from 2024 to 2026, revealing that more than 210,000 suspicious trades brought $143 million in profits to “informed” traders. The study, published this month, is the first to estimate the total profits gained by suspicious accounts.

The researchers used five criteria related to trading timing and bet size to identify accounts making large bullish wagers shortly before news releases. The study defined these activities as “informed trading” rather than “insider trading,” since some flagged large trades occurred in markets influenced by many factors, such as those related to the 2024 US election. Among the top 20 most suspicious trades flagged, most were connected to the outcome of the 2024 election and involved around $16 million in profit; the rest were linked to Federal Reserve decisions and sporting events.

Harry Crane, a statistics professor at Rutgers University, questioned the research method, believing that its suspicious ranking relied too heavily on profitability. The study’s authors acknowledged their method could result in both over- and under-inclusion, and characterized the amount of suspicious trading identified as a “conservative lower-bound estimate of abnormal profits.”

Earlier this month, Polymarket announced a prohibition on trading based on “stolen confidential information” and “illegal tips,” but its offshore exchange does not collect user names or other identity information, making enforcement unclear.