Traders Link Meteora to Insider Trading Allegations as Polymarket Probability Surges Ahead of ZachXBT Investigation

The speculation follows ZachXBT’s February 23 announcement that on February 26, he will release a major investigative report targeting “one of the most profitable companies in the crypto space, where multiple employees have been illicitly leveraging internal data for insider trading”.

At least three newly created Polymarket accounts have collectively staked over $7,000 betting on Meteora’s involvement, while one trader simultaneously opened a 3x leveraged short position of 186,435 MET tokens worth approximately $33,000 on Hyperliquid.

The scrutiny centers on Meteora’s role as a major liquidity hub during the explosive launches of political meme coins including $TRUMP, $MELANIA, and $LIBRA, where reports suggest retail participants lost approximately $4.3 billion while insiders captured an estimated $1.2 billion. The controversy highlights growing concerns about asymmetric information advantages on Solana-based liquidity platforms and the potential for single-sided liquidity strategies to enable structural outperformance by insiders.

Polymarket Traders Bet on Meteora Investigation Outcome

The prediction market activity surrounding Meteora has intensified since ZachXBT’s February 23 teaser about an upcoming investigation. According to PolyBeats monitoring, the probability of Meteora being exposed in the event “Which cryptocurrency company will ZachXBT expose for insider trading” rose to 48% at its peak and currently ranges between 35% and 44%, ranking first among all crypto projects by a significant margin. Other projects, including Pump.fun and Axiom, trail with probabilities around 10-13%.

On-chain data from Lookonchain reveals that a newly created Polymarket wallet deposited $5,891 betting specifically that ZachXBT would accuse Meteora of insider trading. The same wallet also deposited 11,500 USDC into Hyperliquid and opened a 3x leveraged short position of 186,435 MET tokens, worth approximately $33,000 at the time of the transaction. Following these trades, the implied probability on Polymarket contracts rose from approximately 10% to 25%, according to trading data.

Three additional new accounts have collectively staked over $7,000 in the past 24 hours on the same prediction market outcome, with total trading volume for the event exceeding $2.94 million. The concentrated betting activity from newly created wallets has drawn attention from market observers, who note that such patterns can reflect either informed trading or coordinated speculation.

ZachXBT Investigation Timeline and Criteria

On-chain detective ZachXBT announced on February 23 that he would release a major investigative report on February 26 targeting a highly profitable crypto company. The announcement specified that multiple employees are accused of prolonged insider trading using internal data over an extended period.

According to analysis of ZachXBT’s stated criteria, the investigation targets entities meeting two core conditions: high-profitability business operations and the potential for internal data abuse. Meteora, as Solana’s core liquidity layer providing dynamic AMM pools, anti-sniper tools, and meme coin minting services, manages substantial capital flows and operates as a high-revenue DeFi protocol.

The potential data abuse vulnerabilities identified by analysts include:

• Order flow data: As a DEX, employees could view real-time trading orders and gain advance knowledge of large transactions** **
• Liquidity pool information: Dynamic vault and AMM pool data could be used to predict price movements** **
• Token launch advantages: Employees involved in meme coin minting could potentially trade using undisclosed information** **

Meteora’s Role in Political Meme Coin Launches

The controversy centers on Meteora’s function as a primary liquidity venue during the launches of politically themed meme coins, including $TRUMP, $MELANIA (associated with former First Lady Melania Trump), and $LIBRA (linked to Argentine President Javier Milei).

During these launches, liquidity concentrated heavily within Meteora pools as retail investors rushed to participate in early trading. The platform enabled capital deployment before broader exchange listings gained traction, creating an environment where anyone with early awareness of demand patterns could benefit significantly.

Reports suggest retail participants collectively lost approximately $4.3 billion across these meme coin launches, while insiders reportedly captured roughly $1.2 billion. This disparity triggered widespread scrutiny and on-chain analysis of wallet flows and pool activity, with observers noting sophisticated liquidity positioning before peak retail inflows.

Single-Sided Liquidity Strategies and Structural Advantages

Single-sided liquidity strategies deployed on Meteora have emerged as a focal point of the insider trading allegations. Instead of providing balanced liquidity, certain participants deployed capital in ways that reduced directional exposure while maximizing fee extraction during volatility spikes.

These strategies enable early liquidity providers to collect trading fees as retail buyers rush in, then withdraw capital at advantageous moments if token prices surge quickly. Observers argue that such mechanisms gave insiders a structural edge, contributing to the asymmetric outcomes observed during the meme coin launches.

A precedent for such concerns emerged in January 2026, when blockchain analysis firm Bubblemaps identified a wallet associated with the NYC token deployer that created a single-sided liquidity pool on Meteora, extracted approximately $2.5 million USDC at price peaks, and later re-injected only $1.5 million after a 60% price decline, netting roughly $1 million in profit. The case illustrated how single-sided liquidity mechanisms can be exploited for market manipulation.

Legal History and Executive Lawsuits

Meteora has faced prior legal scrutiny related to its token launch activities. The protocol’s co-founder and former CEO Benjamin Chow was named in a class-action lawsuit in 2025, with plaintiffs alleging that he exploited Meteora’s DLMM liquidity pool mechanism to engage in insider front-running and manipulative selling during the issuance of at least 15 meme coins, including LIBRA and MELANIA. The lawsuit claims investor losses exceeded $57 million.

Chow’s official X account (@hellochow) went silent following the February 2025 lawsuit. Meteora was also described as the alleged “mastermind” behind the LIBRA celebrity coin associated with President Milei, according to prior reporting.

Market Impact and MET Token Performance

The speculation surrounding potential insider trading allegations has affected MET token trading activity. Following the Polymarket betting and short positioning, MET’s 24-hour trading volume exceeded $2 million on February 24, 2026, with significant liquidation increases on platforms like Hyperliquid. Open interest in MET perpetual contracts rose approximately 20% following the concentrated trading activity.

On-chain metrics showed a 10% increase in MET transfers to exchanges, suggesting potential preparation for sell pressure. Technical indicators placed MET’s Relative Strength Index (RSI) at 45, indicating neutral momentum but vulnerability to oversold conditions. Volume-weighted average price (VWAP) analysis pointed to an average trading price of $0.18 over the preceding week, with跌破 that level potentially signaling capitulation.

The trader who opened the 3x short position on Hyperliquid positioned for potential downside if the allegations materialize, while the Polymarket betting activity reflects growing market conviction in Meteora’s centrality to the upcoming investigation.

Implications for Solana Ecosystem and Meme Coin Launches

The controversy carries broader implications for Solana-based liquidity platforms and future meme coin launches. Market observers anticipate stricter scrutiny of liquidity patterns, more detailed on-chain analysis from investigators, and heightened awareness of how early pool dynamics influence trading outcomes.

Liquidity venues face reputational risk regardless of whether formal wrongdoing is established, as market narratives increasingly shape ecosystem perceptions. The Meteora insider trading controversy already influences how traders evaluate Solana ecosystem risk, with prediction market activity reflecting sustained attention to the allegations.

Analysts suggest that platforms implementing clearer disclosures and analytics tools could restore confidence, as transparency reduces speculation and the probability that similar controversies dominate prediction markets in the future.

Frequently Asked Questions

What is the Meteora insider trading controversy?

The controversy stems from allegations that insiders at Meteora, a Solana liquidity protocol, may have used non-public information to profit from meme coin launches including $TRUMP, $MELANIA, and $LIBRA. On-chain detective ZachXBT has teased a February 26, 2026 investigation into a highly profitable crypto company where employees allegedly engaged in prolonged insider trading using internal data. Polymarket traders have placed Meteora as the leading suspect, with betting probabilities reaching 48%.

Why are traders linking Meteora to insider trading allegations?

Traders point to several factors: Meteora served as the primary liquidity hub during major political meme coin launches where retail losses reportedly reached $4.3 billion while insiders captured $1.2 billion; single-sided liquidity strategies on the platform may have enabled structural advantages; the protocol’s former CEO faces a class-action lawsuit over alleged front-running; and Meteora meets ZachXBT’s stated criteria of high profitability and potential for internal data abuse through order flow visibility and token launch access.

What trading activity has occurred around the investigation?

At least three new Polymarket accounts have collectively staked over $7,000 betting that ZachXBT will expose Meteora for insider trading. One trader created a new wallet to bet $5,891 on this outcome while simultaneously depositing 11,500 USDC into Hyperliquid to open a 3x leveraged short position of 186,435 MET tokens worth approximately $33,000. Following this activity, MET trading volume exceeded $2 million with open interest in perpetual contracts rising 20%.

Traders on the Polymarket prediction market have identified Solana liquidity protocol Meteora as the primary suspect in an upcoming insider trading investigation by on-chain detective ZachXBT, with the probability of Meteora being exposed rising to 48% on February 23, 2026, before settling at approximately 35-44% across multiple prediction platforms.** **