U.S. lawmakers and regulators are sharpening their focus on prediction markets as a high-profile insider-trading narrative unfolds around Polymarket and Axiom. At the center is a claim by on-chain investigator ZachXBT that an Axiom employee—Broox Bauer—and others allegedly used internal tools to access sensitive user data and execute profitable insider trades, a practice the researcher says may have persisted since early 2025. The timing is notable: Polymarket traders had placed large bets on the outcome of ZachXBT’s disclosures, with activity approaching tens of millions of dollars. In response, Axiom said it has removed access to the implicated tools and pledged to investigate and hold responsible parties to account, framing the episode as a test of governance and user protection within the evolving prediction-market ecosystem.

Key takeaways

• On-chain sleuth ZachXBT alleged that an Axiom employee, Broox Bauer, and others conducted insider trading by leveraging internal tools to access private user data, with the investigation dating back to early 2025.
• Axiom stated it has cut off access to the questioned tools and committed to an internal probe, stressing that the incident does not reflect the broader team or its user-first ethos.
• Polymarket bettors wagered nearly $40 million on the investigation’s outcome, with at least one user profiting about $400,000 and others winning more than $9.7 million on the contract asking which crypto company ZachXBT would expose.
• The episode arrives as U.S. regulators debate the proper reach of federal oversight over prediction markets, with CFTC Chair Michael Selig asserting exclusive jurisdiction and signaling potential clashes with state authorities.
• The case adds to a broader tightening of governance norms and data-access controls across crypto prediction platforms, underscoring regulatory risk and the need for transparent, auditable processes.

Market context: The unfolding events occur against a backdrop of ongoing regulatory scrutiny of prediction markets, where federal and state authorities have historically juggled distinct jurisdictions. The CFTC has stressed federal authority, while some states have pursued their own enforcement actions, creating a patchwork that operators must navigate as markets rely on on-chain data and user-submitted contracts.

Why it matters

The allegations touch on core governance questions for crypto-enabled prediction platforms. If internal tools can be leveraged to access user data for trading advantage, it raises serious concerns about user privacy, algorithmic transparency, and the integrity of market signals. Platforms that rely on public-facing interfaces for forecasting outcomes must demonstrate robust controls, independent audits, and clear incident-response playbooks to preserve trust among participants who treat these markets as both entertainment and hedged exposure to real-world events.

From a market-structure perspective, the episode illustrates how prediction markets intersect with fast-moving on-chain analytics. The ZachXBT disclosures, if verified, would imply a potential mismatch between platform-level governance and user expectations, potentially inviting regulatory actions if risk controls are perceived as lax or opaque. For investors and builders, the case underscores the importance of transparent data-access policies, strict separation between product tooling and private data, and incident disclosures that are timely and verifiable.

On the regulatory front, the scenario underscores the tension between federal authority and state initiatives in enforcement. The CFTC chair’s comments about exclusive jurisdiction suggest a preference for centralized oversight, which could influence how prediction-market platforms structure offerings, disclosures, and compliance programs going forward. Traders and operators should monitor not only the outcomes of internal investigations but also any subsequent regulatory guidance that clarifies permissible use of internal tools, data access, and administrative controls within prediction markets.

Ultimately, the incident matters because it tests the resilience of prediction markets as legitimate, auditable venues for price discovery on real-world events. If platforms fail to demonstrate robust safeguards, participants may migrate to environments with stronger governance or shifted risk profiles. Conversely, transparent corrective steps that restore trust—such as rapid suspension of the implicated tools, independent audits, and clear accountability measures—could reinforce the long-term appeal of crypto-enabled prediction markets as competitive and innovative financial infrastructure.

What to watch next

• Updates from Axiom’s internal investigation, including findings and any leadership actions taken against implicated personnel.
• Any formal statements or enforcement actions from U.S. regulators, particularly the CFTC, regarding prediction-market governance and data-access policies.
• Responses from Polymarket and other platforms about governance changes, risk controls, and disclosures in light of these revelations.
• Further disclosures from ZachXBT or other researchers that could corroborate or challenge the claims of insider trading and tool misuse.
• New disclosures or developments around the contract categories that speculated on the case, including volumes and settlement outcomes.

Sources & verification

• ZachXBT’s X post alleging insider trading by an Axiom employee and others (link: https://x.com/zachxbt/status/2027016064534757659).
• Axiom’s X post acknowledging the incident, stating access to tools has been removed and that the team will investigate (link: https://x.com/AxiomExchange/status/2027018976929423583).
• Polymarket bettors’ activity surrounding the ZachXBT insider-trading exposure, including bets near $40 million (link: https://cointelegraph.com/news/polymarket-bets-zachxbt-insider-trading).
• CFTC Chair Michael Selig’s remarks on exclusive jurisdiction over prediction markets (link: https://cointelegraph.com/news/cftc-michael-selig-defending-prediction-markets).
• Related coverage on Kalshi’s governance and insider-trading-related actions (link: https://cointelegraph.com/news/kalshi-booted-politician-youtuber-insider-trading).

Market reaction and key details

The contemporary disclosure cycle around insider-trading claims in crypto prediction markets marks a pivotal moment for the sector. As the industry grapples with how to regulate and supervise on-chain prediction activities, observers are watching closely how platforms respond to allegations of improper data access and trading influence. The rapid public responses from Axiom reflect a recognition that reputational risk in this space can translate into regulatory risk quickly, especially when user trust is at stake and the outcomes of investigations are uncertain.

Why it matters for users, builders, and the market

For users, the episode reinforces the importance of data governance, transparent tool access, and clear incident reporting. Any perception that insiders could exploit tools to gain an edge undermines confidence in the integrity of the market and may deter participation, especially from risk-averse traders who rely on credible price signals. For builders and operators, the episode highlights the value—and the cost—of implementing verifiable controls, independent audits, and robust user-privacy protections as a competitive differentiator in a crowded field of prediction platforms.

From a market-wide lens, the incident sits at the intersection of regulatory clarity and technological experimentation. The CFTC’s insistence on federal jurisdiction signals that there could be a stricter, more standardized framework for how prediction markets operate in the United States, potentially influencing product design, KYC/AML considerations, and inter-exchange cooperation. Participants should expect a period of heightened scrutiny across platforms as governance models evolve and as regulators balance innovation with the protection of market integrity and consumer data.

What to watch next

• Formal disclosures from Axiom detailing the investigation’s scope and any disciplinary actions.
• Regulatory updates or new guidance from the CFTC and state authorities on prediction-market governance and data access.
• Material changes to Polymarket’s or other platforms’ risk controls and user-privacy policies.
• Additional research or forensic findings from ZachXBT or other researchers that corroborate or challenge the claims.

Sources & verification

• ZachXBT’s X post alleging insider trading by a named Axiom employee and others (link: https://x.com/zachxbt/status/2027016064534757659).
• Axiom Exchange’s official comment and tool-access suspension (link: https://x.com/AxiomExchange/status/2027018976929423583).
• Polymarket bet coverage on ZachXBT insider-trading exposure (link: https://cointelegraph.com/news/polymarket-bets-zachxbt-insider-trading).
• CFTC leadership remarks on exclusive jurisdiction over prediction markets (link: https://cointelegraph.com/news/cftc-michael-selig-defending-prediction-markets).
• Related coverage on Kalshi’s enforcement actions and governance (link: https://cointelegraph.com/news/kalshi-booted-politician-youtuber-insider-trading).

What the investigation changes for the landscape of prediction markets

The case underscores the delicate balance prediction-market platforms must strike between enabling rapid, data-driven bets and enforcing robust controls that prevent misuse of internal tools. It also highlights the evolving role of on-chain researchers in surfacing governance and ethics concerns, and the extent to which platforms must respond quickly and transparently to preserve market integrity and participant confidence. As regulators intensify their focus, the sector will likely see accelerated moves toward standardized governance practices, clearer lines of responsibility, and more explicit privacy safeguards—elements that could determine whether prediction markets remain a vibrant, trust-worthy corner of the crypto ecosystem.

TLDR

• Morph will support native USDC issued directly by Circle’s regulated entities on its network.
• Morph will integrate Circle’s Cross-Chain Transfer Protocol to enable burn-and-mint USDC transfers.
• The integration removes reliance on wrapped USDC versions created by third-party bridges.
• Circle’s CCTP V2 will serve as the standard for cross-chain USDC movement on Morph.
• Morph launched a $150 million Payment Accelerator to support on-chain payment companies.

Morph has moved to support USDC and Circle’s Cross-Chain Transfer Protocol on its network. The integration centers on standardized dollar settlement for on-chain payment systems. The network confirmed it will issue native USDC through Circle’s regulated entities.

Morph Advances Stablecoin Settlement With USDC and CCTP

Morph confirmed that it will support USDC issued directly by Circle affiliates. The network stated that developers will access the official version rather than the bridged copies. This structure keeps redemption aligned with Circle’s regulated reserve framework.

USDC remains a digital dollar backed by cash and cash-equivalent assets. Circle redeems USDC one-to-one for U.S. dollars under its reserve model. Morph said this approach removes uncertainty tied to wrapped stablecoin versions.

Circle’s Cross-Chain Transfer Protocol enables USDC transfers through a burn-and-mint process. The protocol burns tokens on the source chain and mints them on the destination chain. Circle said this model avoids liquidity pools and wrapped bridges.

Morph plans to integrate CCTP V2 as the standard cross-chain framework. Circle has aligned its ecosystem around this version. The companies stated that the integration keeps supply integrity consistent across supported networks.

Morph said the system allows teams to separate funding sources from settlement chains. Developers can move USDC to Morph without converting it into synthetic assets. The network confirmed that balances will remain native after transfer.

Payment Infrastructure Focus Expands Across Ecosystem

Morph launched a $150 million Payment Accelerator to support on-chain payment companies. The program offers funding, technical support, and distribution resources. The network said it targets high-volume settlement platforms.

The accelerator focuses on gateways, remittance providers, and card-linked services. Morph stated that payment firms require predictable settlement assets. The network positioned USDC as the default settlement token within this initiative.

Card and neobank-style platforms often manage assets across several chains. However, settlement layers require stable balances on a single network. Morph said CCTP allows direct USDC movement without wrapped conversions.

Remittance and payout providers have increased stablecoin usage for cross-border transfers. Circle has expanded partnerships across the financial ecosystem for this purpose. Morph stated that native issuance improves reconciliation and tracking.

Payment gateways require consistent asset behavior across chains. Wrapped tokens can introduce variations in redemption paths. Morph said the official USDC reduces discrepancies during settlement cycles.

DeFi applications within the ecosystem also rely on predictable collateral assets. USDC supports lending, routing, and liquidity operations across networks. Morph confirmed that CCTP maintains uniform supply accounting.

Crypto influencers are taking a preprint, non-peer-reviewed research paper as a terrifying warning about a new unlock for AI agents that allegedly grants them power to deanonymize crypto wallets.

Almost all blockchains like Bitcoin and Ethereum employ pseudonymity in wallet addresses, which are usually presented as a string of characters.

Although wallet addresses are just a string of characters, AIs and easy-to-use agentic tools like Claude Cowork and Perplexity Computer are advancing the capabilities of casual users to deanonymize them.

According to their research, new versions of AI are gaining the power to conduct large-scale deanonymization by taking in posts by billions of humans and linking distinct usernames using highly-processed probability scores. 

This is akin to making educated inferences that the person behind one username is likely the same person behind another username.

Researchers used Claude tools by the AI giant Anthropic. The paper is a preprint and as such hasn’t been accepted for publication in a peer-reviewed academic journal. However, its conclusions are potentially disturbing and reinforce concerns about crypto privacy.

Exploiting a common opsec error

Unfortunately, many people re-use the same crypto wallet addresses. Although this is bad practice from an operational security (OpSec) and privacy perspective, the commonplace occurrence allows researchers to glean and infer a tremendous amount of information.

Tracing and deanonymizing crypto has been popular for years at Chainalysis, Elliptic, TRM, Crystal, Coinglass, and Arkham.

However, the use of AI agents to easily link wallets to social and internet platforms is the breakthrough.

Users of Claude Cowork or Perplexity Computer are already asking AI to connect crypto wallets to activity elsewhere.

• The World Liberty Financial governance overhaul proposal proposes 180-day staking for voting rights.
• The WLFI price closely mirrors Bitcoin’s price and overall crypto market sentiment.
• The key WLFI price levels to watch are the support at $0.115 and the resistances at $0.120 and $0.1428.

World Liberty Financial (WLFI) is making headlines with a major governance overhaul proposal that could reshape how its token holders participate in the protocol.

The proposal requires all holders with unlocked WLFI tokens to stake them for at least 180 days to qualify for governance voting.

This is designed to encourage long-term commitment and reduce short-term speculation.

If the proposal passes, voting power will now take into account both the number of tokens staked and the remaining lock-up time.

Larger holders who commit for longer periods will have a stronger influence on protocol decisions.

In addition to staking requirements, the overhaul introduces a tiered reward system.

Token holders who stake and participate in at least two governance votes during the lock-up period can earn a roughly 2% annual yield.

These incentives aim to reward active governance engagement rather than just holding tokens passively.

WLFI is also integrating USD1 stablecoin usage into its reward framework. Stakers may receive additional benefits for depositing USD1 on the WLFI trading and lending platform.

Large stakers, designated as nodes or supernodes, will gain further privileges such as access to USD1 conversion services and priority partnership opportunities.

World Liberty Financial (WLFI) token price reaction

These reforms come as WLFI’s market performance reflects broader crypto trends.

The token currently trades at $0.1155, down about 2.9% over 24 hours, with a market cap of roughly $3.2 billion.

Notably, WLFI’s price action has closely mirrored Bitcoin’s recent 2.55% decline, as well as a 2.48% drop in total cryptocurrency market capitalisation.

This high correlation indicates that WLFI is behaving as a high-beta asset, amplifying broader market movements.

Market sentiment is notably negative, with the Fear & Greed Index indicating “Extreme Fear.”

Traders are watching Bitcoin’s price closely, as any significant move below $66,734 could drag WLFI lower.

Conversely, Bitcoin’s stabilisation above $66,000 may allow WLFI to consolidate near its current range between $0.115 and $0.12.

Technically, WLFI has found short-term support around $0.0994. Resistance levels have been observed at $0.1200, $0.1428, and $0.1632.

A sustained move above $0.1200 could pave the way for higher ranges, while failure to hold above support could trigger testing of lower levels near $0.11.

The token’s historical price volatility highlights both opportunities and risks.

It recently reached an all-time high of $0.3313 but has since declined more than 65%.

Its all-time low in recent weeks was $0.09831, showing that buyers have stepped in at sub-$0.10 levels.

WLFI price forecast

The governance overhaul adds a long-term bullish element, as staking reduces circulating supply and encourages sustained engagement.

However, WLFI’s price remains tethered to broader market trends, making Bitcoin and general crypto sentiment key determinants for its short-term trajectory.

The immediate support lies at $0.115, and a breakdown below this level may see WLFI test $0.11, especially if Bitcoin weakens further.

On the upside, breaking through $0.1200 could open the door to $0.1428, followed by $0.1632 if bullish momentum persists.

The MicroStrategy stock price couldn’t continue its upswing despite the company continuing to buy more Bitcoin. Its latest $40 million purchase, on February 23, came just as the stock began sliding again. But that wasn’t the entire story.

While MSTR stock dipped by over 9% on February 24, a 16% bounce followed on February 25, showing excitement. At press time, it’s down over 3% since yesterday’s close. The stock is now down about 4% from last Friday’s high and almost 63% over six months, raising fresh concerns about a deeper breakdown, all while the BTC stash was loaded again.

Latest $40 Million Bitcoin Buy Fails to Stop MSTR’s Slide

MicroStrategy added 592 Bitcoin on February 23, spending about $40 million at an average price near $67,286. This pushed its total holdings to 717,722 Bitcoin, with an overall average cost basis of $76,020.

Normally, such aggressive buying supports investor confidence because it signals long-term conviction in Bitcoin’s future.

Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here.

But at this time, the MicroStrategy stock price continued to fall rather than stabilize, moving steadily on its bear-flag breakdown path that started on February 19, despite a few rebounds. This weakness closely reflects Bitcoin’s own behavior.

The stock had briefly rallied to $137 on February 25, riding Bitcoin’s rebound from $64,500 to $69,400, a 2.5% move. However, as Bitcoin cooled again, MicroStrategy immediately reversed lower, showing how tightly its performance remains tied to Bitcoin’s direction.

This shows MicroStrategy is still trading like a leveraged Bitcoin proxy. When Bitcoin pauses or weakens, MicroStrategy often falls faster because its valuation already assumes strong upside from its Bitcoin holdings.

The latest Bitcoin purchase did not change that dynamic, raising a more important question: whether institutional investors still support the stock.

Institutional Money Flow Signals Growing Exit Risk

The Chaikin Money Flow (CMF) indicator is now flashing a warning sign. CMF measures whether large investors are buying or selling by combining price and volume.

When CMF rises above zero, it signals accumulation, meaning institutional investors are buying. When it drops below zero, it signals distribution, meaning capital is leaving the asset.

Earlier, between January 12 and February 23, CMF rose while MicroStrategy’s stock price fell, with a few bounces above the zero line. This bullish divergence showed that institutional investors were quietly accumulating shares during weakness. That accumulation even translated into net positive flows at times, leading to sizeable rebounds.

It even helped fuel a 33% rebound between February 5 and February 25. However, the situation is different now. The CMF has flatlined, hugging the zero line. This shows institutional money is undecided at the moment.

What’s troubling is that the shift happened immediately after MicroStrategy announced its latest Bitcoin purchase on February 23. CMF suggests institutional investors may not be accumulating MicroStrategy stock despite its Bitcoin buying.

This disconnect weakens the bullish case and suggests confidence in the stock itself may be fading. The next direction the CMF line takes might decide the fate of the MSTR stock price.

At the same time, momentum indicators show that the recent drop (between February 25 and February 26) was not unexpected, as underlying strength had already been weakening.

Bearish Divergence Warned of MSTR Stock Price Drop

The Relative Strength Index (RSI), which measures momentum strength on a scale from 0 to 100, showed a bearish divergence before the recent drop.

Between December 9 and February 25, the MicroStrategy stock price formed a lower high, while RSI formed a higher high. This pattern signals weakening momentum because the price is rising without strong buying support.

This type of divergence often appears before major pullbacks. Similar divergences have appeared multiple times in recent months, and each one led to sharp corrections.

For example, a previous divergence completed in mid-Jan triggered a 45% crash, forming the major downtrend that still defines the stock’s broader structure.

A recent one, concluding on February 20, led to a near 13% dip. The current one has already eaten into 6% of the gains, but because the broader bearish pattern remains active, this decline may be only the early stage of a larger move lower. That wouldn’t be great news for the MicroStrategy shareholders.

MicroStrategy Stock Price Breakdown Structure Points Toward $70

The MicroStrategy stock price has already broken below a bear flag pattern, which is a continuation pattern that forms during temporary rebounds inside larger downtrends. When this pattern breaks down, it usually leads to another strong leg lower.

Right now, the most important support level sits near $119. If this level fails, the next support appears near $106, followed by a stronger technical level near $85.

However, the full breakdown projection based on Fibonacci retracement levels points toward the $71 (the $70 zone) region, which aligns with the 0.786 Fibonacci level and pole’s projected 45%+ dip.

On the upside, the first sign of strength would only appear if MicroStrategy reclaims $139. However, the broader bearish structure would remain intact unless the stock breaks above $155, which would invalidate the breakdown pattern and signal a potential trend reversal.

Until those resistance levels are reclaimed, the current structure suggests MicroStrategy remains vulnerable to further downside, with the $70 zone now emerging as a realistic technical target if $85 gives way, given Bitcoin’s continued weakness.

Lawyers representing the US government in the case against Sam “SBF” Bankman-Fried have two weeks to respond to the former FTX CEO’s motion for a new criminal trial.

In a Wednesday filing in the US District Court for the Southern District of New York, Judge Lewis Kaplan said that the US government shall respond by March 11 to SBF’s motion for a new trial. The former FTX CEO, who was convicted of seven felony counts in 2023 and later sentenced to 25 years in prison, requested a new trial earlier this month, claiming that new witness testimony could help bolster his case.

Bankman-Fried, once revered by many as one of the most prominent faces representing the crypto and blockchain industry, was at the center of the controversy around the collapse of FTX. He stepped down as CEO in November 2022, later facing criminal charges in the US for the misuse of user funds.

After Kaplan ordered the former CEO to serve 25 years in prison in March 2024, SBF’s lawyers filed to appeal the conviction and sentence. As of Thursday, the US Court of Appeals for the Second Circuit had not reached a ruling on the filing.

Related: Kalshi bans US politician over alleged insider trading violation

Former Alameda Research CEO Caroline Ellison, who testified against SBF at trial as part of a plea deal with US authorities, was released in January, having spent 440 days in US custody. Ryan Salame, the former co-CEO of FTX Digital Markets, was sentenced to more than seven years and remains incarcerated at the time of publication.

Is Bankman-Fried angling for a presidential pardon?

Although the former CEO was largely silent on social media for his first year in prison, Bankman-Fried later began posting messages supporting US President Donald Trump and challenging information about the collapse of FTX.

In March 2025, SBF gave an interview to political commentator Tucker Carlson — a move that reportedly led to his transfer to a federal correctional institution — claiming that he had better relationships with Republicans than Democrats.

This year, he has posted several times to X, claiming that there had been “political bias” in his case. Bankman-Fried praised Trump’s actions in “standing up” to such bias, while also criticizing Kaplan for overseeing the civil defamation case brought against the then-presidential candidate in 2023.

However, despite Bankman-Fried’s efforts and speculation by many in the crypto industry, the White House has repeatedly said that Trump is not considering a pardon for the former CEO, both in a January New York Times interview and according to a Tuesday report by Fortune. Trump has pardoned several figures in the crypto and blockchain industry since taking office, including former Binance CEO Changpeng Zhao and Silk Road founder Ross Ulbricht.

Magazine: Big questions: Should you sell your Bitcoin for nickels for a 43% profit?