A US Army soldier was charged with using classified information about the timing of the capture of then-Venezuelan President Nicolás Maduro to make more than $400,000 trading on Polymarket's prediction market, the Justice Department said Thursday. Gannon Ken Van Dyke, 38, a special forces soldier stationed at Fort Bragg in Fayetteville, North Carolina, was involved in the planning and execution of Operation Absolute Resolve, a military effort to capture Maduro, the US said.
Prosecutors said that around Dec. 26, Van Dyke created and funded a Polymarket account, and began trading on contracts tied to whether Maduro would be out as Venezuela's leader. He placed a total of about 13 bets from Dec. 27 through the evening of Jan. 2 all taking “YES” positions on various Maduro-related questions posed by the trading platform, which allows users to wager on the outcome of real world events.
The exploding popularity of prediction markets has raised widespread concern that the platforms are vulnerable to insider trading because there are so many new topics that are now open for trading.
Israeli authorities filed charges in February against two people, including a military reservist, accusing them of using confidential information to place bets on Polymarket. Democrats in Congress have recently proposed new laws aimed at cracking down on insider trading on prediction markets.
Soldier's Photo
The indictment does not mention whether Van Dyke was involved in the raid itself. But it does say that hours after Maduro was apprehended a photo of Van Dyke was taken and uploaded to his Google account depicting him “on what appears to be the deck of a ship at sea, at sunrise wearing US military fatigues, and carrying a rifle, standing alongside three other individuals wearing US military fatigues.”
The same day as the raid, Van Dyke cashed out his bets and sent the proceeds to a “foreign cryptocurrency ‘vault,'” the indictment says, before asking Polymarket to delete his account.
“Prediction markets are not a haven for using misappropriated confidential or classified information for personal gain,” Manhattan US Attorney Jay Clayton said in statement. “The defendant allegedly violated the trust placed in him by the US government by using classified information about a sensitive military operation to place bets on the timing and outcome of that very operation, all to turn a profit.”
A spokesperson for the US attorney's office said he was unable to provide information about a lawyer for Van Dyke.
Polymarket's Cooperation
Polymarket said in a post on X that it identified a trader using classified information, referred the matter to the Justice Department and cooperated in the government's investigation.
“Insider trading has no place on Polymarket,” the company said. “Today's arrest is proof the system works.”
Prosecutors allege that Van Dyke was assigned to the US Joint Special Operations Command, which “conducts special operations against threats to protect the homeland and US interests abroad.”
As part of his role, he signed a nondisclosure agreement regarding “Western Hemisphere Operations,” acknowledging that the US government had placed a “special confidence and trust” in him and that he “promised to “never divulge anything” he learned, according to the statement.
Virtual Private Network
Polymarket's terms of service bar Americans from using the company's international platform. The indictment says that Van Dyke was able to circumvent that and create an account by using a virtual private network that made it look as though he was logging in from a foreign country.
Polymarket uses a blockchain-based platform that does not require the same identity checks as regulated US financial exchanges.
Prosecutors say Van Dyke bets took the “YES” position on various Maduro-related questions such as: “US Forces in Venezuela...by January, 31, 2026”; “Maduro out...by January, 31, 2026”; “Will the US invade Venezuela by...January 31” or “Trump invokes War Powers against Venezuela by...January 31.”
He allegedly bet a total of about $33,034 on these outcomes. His bets reaped illicit profits of about $409,881, according to the indictment. After putting his winnings in a cryptocurrency account, Van Dyke allegedly moved the proceeds to a newly created brokerage account, which prosecutors said was traceable to his Polymarket trades.
Van Dyke faces five counts, including three charges he violated the Commodity Exchange Act, each of which carries a maximum prison term of 10 years in prison, and one count of wire fraud, which carries as long as 20 years in prison.
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‘Eddie Murphy Rule'
The Commodity Futures Trading Commission lodged a parallel civil complaint against the soldier, marking the first time the US derivatives regulator filed a prediction markets insider trading case.
It was also the first time the agency used what's known as the “Eddie Murphy Rule” in an insider trading case, according to the CFTC. The rule is named after the star of “Trading Places,” the 1983 movie in which characters played by Murphy and Dan Aykroyd used a pilfered government orange crop report to make millions betting on orange juice futures.
Polymarket and its main rival, Kalshi, have both recently announced new policies designed to stop people from using nonpublic information on the platforms.
On Wednesday, Kalshi said it had fined and banned three political candidates who had bet on their own elections.
Polymarket has come under scrutiny for offering contracts tied to military operations, which most other prediction market platforms avoid, in part because of the national security implications, and in part because of the vulnerability of these contracts to insider trading.
The White House and handful of other government offices have recently warned employees that they are not allowed to trade on prediction markets using confidential information. President Donald Trump was asked about Thursday's arrest and told reporters, “I'll look into it,” adding that he long had issues with the concept of event-betting platforms. Trump's son, Donald Trump Jr., is an adviser to both Kalshi and Polymarket and an investor in Polymarket through the venture fund 1789 Capital, where he's a partner.
Maduro and his wife were arrested by US special forces in the predawn hours of Jan. 3 at their home in Caracas, Venezuela and remain in US custody awaiting trial in New York. They have pleaded not guilty.
Prosecutors allege Maduro played a key role in a conspiracy to traffic cocaine into the US and that he and others partnered with groups designated as foreign terrorist organizations.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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