Crypto investigator ZachXBT detailed the results of a recent investigation today that show how a group of Axiom employees allegedly abused weak internal controls to spy on sensitive user data and carry out insider trading using wallet activity.
The previously teased exposé shows a group of Axiom employees and moderators discussing how they used the company’s dashboard to pull up “anything” on its users.
They apparently mapped out key opinion leaders (KOLs) within the crypto industry and targeted wallet details made available by one of the company’s senior business development professionals, Broox Bauer.
The group was recorded strategizing on how to insider trade and showed Bauer describing the ways he can pull up Axiom user data by tracking a user’s reference code, wallet, or user ID.
Bauer lays out ground rules to his group during the call, telling them not to send any Discord messages alluding to what they’re doing, and promising that if they send him specific identifying information, he’ll then get them “what they need.”
Read more: Here’s how insiders dump blockchain game tokens using Sybil attacks
Bauer also details how he’s slowly increased the number of wallets he’s probing from an initial 10 to 20 “so it does not look that suspicious.” He also promises one of his members a profit of $200,000 thanks to his access to Axiom’s data.
ZachXBT’s findings also revealed how the group targeted “a trader with a poor reputation for using his followers on X and Telegram as exit liquidity.”
Indeed, one member in the call says, “Time to farm the farmers.”
Axiom shocked by ZachXBT’s findings
In response to ZachXBT’s investigation, Axiom said it’s “shocked and disappointed to hear that someone on our team abused internal customer support tools to look up user wallets.”
“We have removed access to these tools and will continue to investigate and hold the offending parties responsible,” the crypto exchange said, adding, “This does not represent us as a team, we have always tried to put the user first. We’ll share updates on our twitter as we learn more.”
ZachXBT hinted that the insider trading evidence might be fit for a legal case against the alleged group in the Southern District of New York.
He said, “Whether or not criminal charges are filed, I hope the Axiom co-founders further investigate the abuse and consider taking legal action against the employees involved.”
ZachXBT’s Axiom teaser caused $38 million hype train
On February 23, ZachXBT announced that he’d undertaken a “major investigation” into one of “crypto’s most profitable businesses where multiple employees abused internal data to insider trade over a prolonged period of time.”
This teaser said all would be revealed today, sending Crypto Twitter into speculation overdrive as users tried to guess which firm he was talking about. The post alone has over 11 million views.
It soon caught Polymarket’s attention, and it launched a prediction market based on which firm would be outed.
This market attracted $38 million in trading volume, with Polymarket also taking bets on which day the investigation would be released and at what specific time.
Read more: Israeli soldier allegedly used military secrets to gamble on Polymarket
Ironically, some in crypto warned users to avoid this particular market, as the potential for somebody related to the investigation to use insider information to trade on the market is high.
ZachXBT also noted that after the teaser was dropped, “prediction market bros started raiding my DMs for insider info.” He also suggested that the number of interviewees means a “leak is probably inevitable.”
One Axiom employee was left red-faced when they confidently denounced Axiom’s potential to be in ZachXBT’s exposé. They have since apologised for their wayward takes.
“Devin” has also subsequently claimed that they’d been trading in this prediction market about the firm where they work and lost $20,000 as a result.
The potential for insider trading is a frequent criticism of prediction markets. Indeed, Polymarket rival Kalshi fined Mr. Beast’s editor, Artem Kaptur, for insider trading ahead of various markets related to his YouTube channel.
Kalshi also fined the former California Governor Kyle Langford for using non-public information to insider trade in his own elections.
An investigation was also opened by Israel against two military personnel who were accused of using military secrets to insider trade markets involving missile strikes against Iran.
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