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Axiom Crypto Exposed: ZachXBT Alleges $400k Insider Trading

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Axiom Crypto Exposed: ZachXBT Alleges $400k Insider Trading

ZachXBT just uncovered what looks like a coordinated insider trading ring at Axiom crypto. According to his findings, senior employees used internal data tools to front-run user trades for more than 10 months, allegedly pocketing over $400,000 in the process. The method involved privileged back-end access that allowed staff to track and mirror high-value wallets before the broader market reacted.

This points to deeper governance failures at a platform generating roughly $390 million in annual revenue. Non-technical staff reportedly had unrestricted access to live user identifiers, exposing a serious breakdown in internal controls.

Key Takeaways

  • The Actor: Senior business development staff with unrestricted admin access to live user databases.
  • The Method: Cross-referencing internal UIDs with on-chain data to identify and front-run KOL wallets.
  • The Failure: A YC-backed unicorn generating $390M revenue operating with zero role-based access controls.

How the Insider Trading Scheme Operated Inside Axiom Crypto

The scheme was simple and effective. Investigators say employees used internal admin dashboards meant for support and compliance to pull private user data. By linking User IDs to on-chain wallets, they could identify high-profile traders and institutions behind supposedly anonymous addresses.

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From there, the play was straightforward. Monitor activity, then trade ahead of it. Buy before a large wallet pushed price. Sell before a whale exits. It was front-running their own users.

The activity reportedly lasted at least 10 months. The troubling part is that business development staff had the same level of system access as technical security teams. That breakdown in internal controls created the information asymmetry that made the scheme possible.

Discover: The best crypto to diversify your portfolio with

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$390M Revenue vs. Zero Access Controls: What Is Axiom Team Response?

Axiom generated $390 million in revenue and scaled rapidly, but the investigation shows its internal controls lagged far behind its growth.

The platform reportedly lacked basic role-based access controls. Business development staff had broad visibility into user identifiers and trading data, creating a “God mode” environment. Proper least-privilege systems and audit logs likely would have flagged the activity early. Instead, it allegedly went unnoticed for nearly a year.

The case highlights a common startup flaw: growth and volume are prioritized, while governance is deferred. That works at a small scale. At billions in volume, it becomes a liability.

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Axiom has confirmed a full internal audit. But the reputational damage is significant, and regulators may view the alleged $400,000 in insider profits as potential fraud.

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The post Axiom Crypto Exposed: ZachXBT Alleges $400k Insider Trading appeared first on Cryptonews.

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Crypto World

CFTC Staff Share FAQ on Crypto Collateral

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CFTC Staff Share FAQ on Crypto Collateral

The US Commodity Futures Trading Commission has given more details on its expectations for the use of crypto as collateral amid a pilot program that the agency launched last year.

In a notice on Friday, the CFTC’s Market Participants Division and Division of Clearing and Risk responded to frequently asked questions that emerged from two staff letters issued in December that established a pilot allowing crypto to be used as collateral in derivatives markets.

The notice reminded futures commission merchants wanting to take part in the pilot that they must file a notice with the Market Participants Division “which includes the date on which it will commence accepting crypto assets from customers as margin collateral.”

The crypto industry has argued that crypto technology is best suited for 24-7 trading and instant settlement, and the CFTC’s guidance in December clarified what tokenized assets can be used as collateral, along with how to value them and calculate how much is needed for a trading position.

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CFTC aligns guidance with SEC

The CFTC made clear its guidance was to align with the Securities and Exchange Commission, as the two agencies work together on a regulatory framework for crypto.

The CFTC said that capital charges, the amount that must be held to cover losses, would be “consistent with the SEC” and that futures commission merchants should apply a 20% capital charge for positions in Bitcoin (BTC) and Ether (ETH), while stablecoins should get a 2% charge.

Source: Mike Selig

The notice added that futures commission merchants taking part in the pilot can only accept Bitcoin, Ether, or stablecoins for the first three months and must give prompt notice of any significant cybersecurity or system issues. They must also file weekly reports of the total crypto held across customer account types.

After the three-month period, other cryptocurrencies can be accepted as collateral and the reporting requirements will end.

Related: SEC interpretation on crypto laws ‘a beginning, not an end,’ says Atkins

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The notice also clarified that “only proprietary payment stablecoins may be deposited as residual interest in customer segregated accounts” and that futures commission merchants can’t accept other cryptocurrencies for that purpose.

The CFTC said that crypto and stablecoins cannot be used for collateral of uncleared swaps, but swap dealers can use tokenized versions of an eligible asset if it meets regulatory requirements and grants the holder the same rights in its traditional form.

Meanwhile, derivatives clearing organizations can accept crypto and stablecoins as initial margin for cleared transactions if they meet CFTC requirements regarding minimal credit, market, and liquidity risks.

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

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