Polymarket, the popular crypto-based prediction market, is facing intense scrutiny after a single user executed a near-flawless series of trades, netting over $1 million and igniting a firestorm of insider trading allegations. The bets centered on one of the platform’s most-watched events: Google’s “Year in Search 2025”, where traders wagered on which person would be the year’s most-searched figure. While the markets and social media buzz heavily favored names like Pope Leo XIV or Donald Trump, the official winner was the relatively obscure singer d4vd.
A Masterclass in Prediction or Privileged Information?
The trader, known on-chain first as “AlphaRaccoon” and later as “0xafEe”, didn’t just bet on the underdog. They executed a stunningly precise strategy, correctly predicting nearly every major outcome in the Google search category. This included accurately betting “Yes” on d4vd and “No” on all the leading candidates, despite d4vd having only a 0.2% chance of winning just days before the results were published. This was not a first for the account, which had previously profited over $150,000 from a bet on Google’s Gemini 3.0 release date. The sheer accuracy and timing of the trades have led many in the community to conclude the user had access to the official results before they went public, with one viral theory suggesting Google briefly published the data early before taking it down.
Insider Trading: A Bug or a Feature of Prediction Markets?
The incident has split the Polymarket community into two camps and forced a fundamental debate about the nature of these platforms. On one side, many users see this as a clear case of market manipulation that damages integrity. As one prominent user lamented on social media, anonymous insider trading brings “toxic flows” to the market, allowing those “in the know” to profit at the expense of regular participants.
On the other side, some argue this is an inevitable, and perhaps even beneficial, aspect of unregulated prediction markets. The thinking goes that insider trading, while ethically murky, is the fastest way to incorporate hidden, truthful information into market prices. Author Gergely Orosz summarized this view, stating, “I thought it’s an open secret that unregulated betting markets… are the perfect place to do insider trading?” He concluded that participating without insider information means “you’re probably giving free money to insiders”. In this view, insiders aren’t breaking the game—they’re just playing it at a different level, and their actions ultimately make the market’s odds more accurate.
A Legal Gray Zone with Lasting Implications
This controversy highlights a critical vulnerability in crypto-based prediction markets. Traditional insider trading laws are designed for securities markets and don’t cleanly apply to unregulated platforms betting on non-financial outcomes like search trends. This creates a regulatory void where monetizing privileged information carries little legal risk. The scandal also arrives as Polymarket seeks to rebuild its image, having recently settled with U.S. regulators and planning a return to the market.
The fallout from the “Google Search” episode is a pivotal moment. It crystallizes the core tension between fairness and efficiency that all prediction markets must navigate. For these platforms to mature and gain mainstream trust, they will need to develop clear policies and technical safeguards to manage the influence of privileged information. Until then, every major market will be shadowed by the same question that now follows Polymarket: Is the crowd truly wise, or is it just being played?
