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- ZachXBT is set to release a report on Thursday alleging long-term insider trading by employees at a major crypto firm.
- Meteora currently leads Polymarket odds, though over $7 million has been spread across several potential targets.
- CFTC Chair Michael Selig is asserting federal control over prediction markets, clashing with state regulators who view them as gambling.
The crypto world is currently locked in a high-stakes guessing game, but it isn’t over price action. Instead, millions of dollars are flowing into prediction markets as traders attempt to identify the next target of ZachXBT, the industry’s most prominent on-chain investigator.
On Monday, the anonymous sleuth teased an upcoming report involving a “major investigation” into what he described as one of the most profitable businesses in the digital asset space. According to ZachXBT, the exposé will reveal how multiple employees at an unidentified platform allegedly exploited internal data to engage in insider trading over a significant period.
Speculation Hits Fever Pitch on Polymarket
By Tuesday, the frenzy had moved to Polymarket, where users have already wagered more than $7 million on which company will be named. The decentralized platform allows users to buy “shares” in various outcomes, effectively creating a real-time sentiment gauge for the investigation.
Currently, the decentralized liquidity platform Meteora is the leading suspect among bettors, holding a 29% probability. Other names appearing in the betting pools include high-profile exchanges and firms like MEXC, Axiom, and Wintermute. It is important to note that these odds reflect market speculation rather than confirmed leaks; however, the sheer volume of capital involved underscores the weight ZachXBT’s findings carry in the ecosystem.
Regulatory Tensions Reach a Boiling Point
While traders focus on the investigation, the very platforms they are using to bet are caught in a massive jurisdictional tug-of-war. Michael Selig, Chair of the Commodity Futures Trading Commission (CFTC), recently asserted that the federal regulator holds “exclusive jurisdiction” over prediction markets.
Selig has been vocal in his opposition to state-level crackdowns, categorizing these platforms as derivatives markets rather than illegal gambling. This stance puts the CFTC in direct conflict with states like Massachusetts, which have pursued enforcement actions against platforms like Polymarket. Selig warned that the agency is prepared to defend its authority in court, arguing that state-level interference undermines federal oversight.
Also Read: ZachXBT Exposes Alleged $2M Coinbase Support Scam—Here’s How It Worked
A Crucial Moment for Market Integrity
The intersection of ZachXBT’s report and the CFTC’s legal battle highlights a pivotal moment for crypto. If the investigation proves that insiders at a major firm were front-running their own users, it could trigger a new wave of calls for stricter internal controls.
Simultaneously, the outcome of the CFTC’s fight for control over prediction markets will determine whether these platforms become a staple of financial forecasting or remain sidelined by a patchwork of state bans. For now, the industry is waiting for Thursday, when the sleuth’s evidence is expected to go public.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
