Polymarket pilots market-order fee amid regulation scrutiny

TLDR

• New Polymarket account earned over $500K trading crypto up/down markets.
• About 70% lost; under 0.04% captured over 70% of profits.
• Columbia study found wash trading ~60% December, ~5% by May; 14% wallets flagged.

A Polymarket account opened just one month ago has made over $500,000 trading crypto up/down markets. The rapid gain underscores how quickly capital can concentrate in thin, event-driven venues.

The outlier sits against a skewed backdrop. According to BitcoinWorld, roughly 70% of Polymarket’s 1.7 million trading addresses recorded losses while fewer than 0.04% captured over 70% of total profits in data reported late 2025.

Concerns about market quality have been documented alongside these profit skews. As reported by Cointelegraph, a Columbia University group found indications that wash trading may have accounted for around 60% of activity last December before subsiding to about 5% by May, and flagged about 14% of 1.26 million wallets for behavior consistent with wash trading.

Why it matters: market integrity, fees, and user risk now

These dynamics raise regulatory questions about prediction markets in the United States. Said George Canellos, a securities and governance lawyer, at The Information, prediction market contracts are generally not securities, implying less SEC relevance and more potential CFTC oversight, though statutory clarity around insider-style conduct remains limited.

Lawmakers have begun to respond to headline trades involving fresh wallets and sensitive topics. As reported by Business Insider, Rep. Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act to prohibit federal officials from placing trades that rely on material non-public information.

Platform policy and design also shape user risk. After public debate over insider-style advantages, Polymarket’s founder Shayne Coplan has argued that information-bearing traders can improve price discovery: “That’s how prediction markets work, some people know more,” said Coplan, per CasinoBeats.

Fees and execution rules are changing too. According to PANews Lab, Polymarket began piloting a market order fee in its sports marketplace on February 18, 2026, a move that could alter order flow, spreads, and slippage for both human and automated traders.

Broader crypto-market context remains mixed. At the time of this writing, Coinbase Global (COIN) traded around $164 in after-hours, little changed on the session, based on data from NasdaqGS via Yahoo; this context is directional, not prescriptive.

What the new market order fee means for sports liquidity

A market order fee makes immediate, liquidity-taking trades more expensive relative to patient limit orders. In thin order books, such a fee could reduce sudden price sweeps, moderate volatility bursts, and marginally reward passive liquidity providers.

However, higher taker costs may also slow price discovery during breaking news and widen effective spreads when liquidity is scarce. In categories where wash trading signals have appeared, additional frictions could deter some manipulative patterns, but also discourage organic liquidity until markets re-equilibrate.