A U.S. Army master sergeant has been charged with using classified information about a military operation in Venezuela to place bets on a prediction market, resulting in profits of over $400,000.
The case has brought increased scrutiny to prediction markets and insider trading regulations.
Key Individuals and Charges
Gannon Ken Van Dyke, 38, an active-duty U.S. Army master sergeant stationed at Fort Bragg, North Carolina, has been charged with unlawful use of confidential government information, theft of nonpublic government information, commodities fraud, wire fraud, and making an unlawful monetary transaction.
Van Dyke, a member of the U.S. Army Special Forces, has been on active duty since 2008 and was promoted to master sergeant in 2023. He pleaded not guilty to the charges on Tuesday in federal court in Manhattan. He was released on a $250,000 unsecured bond with travel restrictions to California, New York, and North Carolina, and was ordered not to possess firearms or consume excessive alcohol. He is scheduled to appear before U.S. District Judge Margaret M. Garnett on June 8.
Alleged Actions and Timeline
According to the indictment, Van Dyke participated in the planning and execution of Operation Absolute Resolve, a military operation to capture Venezuelan President Nicolás Maduro, from approximately December 8, 2025, to January 6, 2026. Van Dyke signed nondisclosure agreements prohibiting the disclosure of classified or sensitive information.
The timeline of alleged actions includes:
- December 24, 2025: Van Dyke applied to open an account at Kalshi, a CFTC-licensed prediction market. Kalshi later confirmed it blocked the account.
- December 26, 2025: Van Dyke created a Polymarket account, allegedly using a VPN to disguise his location.
- December 27, 2025 - January 26, 2026: Van Dyke placed approximately 13 bets totaling about $33,034 on Polymarket. All bets took the "YES" position on outcomes including U.S. forces in Venezuela by January 31, 2026, Maduro out by January 31, 2026, U.S. invasion of Venezuela by January 31, 2026, or President Trump invoking War Powers against Venezuela by January 31, 2026. Most bets occurred on the night of January 2, 2026.
- January 3, 2026: Maduro and his wife were apprehended in Caracas, Venezuela. Polymarket resolved several contracts to "YES," and Van Dyke profited approximately $409,881. Hours after the operation, Van Dyke allegedly uploaded a photograph to his Google account showing him in military fatigues on a ship deck.
- January 6, 2026: Van Dyke asked Polymarket to delete his account, falsely claiming he had lost access to the email address. He also changed the email on his cryptocurrency exchange account.
Following the operation, Van Dyke sent most of the proceeds to a foreign cryptocurrency vault before depositing them into a newly created online brokerage account. He withdrew the majority of the funds from his Polymarket account on the same day as the operation.
Legal Proceedings and Penalties
The indictment was unsealed in New York federal court. Van Dyke faces:
- Three counts of violating the Commodity Exchange Act (maximum 10 years each)
- One count of wire fraud (maximum 20 years)
- One count of unlawful monetary transaction (maximum 10 years)
Assistant U.S. Attorneys Nicholas W. Chiuchiolo, Ryan B. Finkel, and Juliana N. Murray are handling the case, with assistance from Acting Deputy Chief Tanner Kroeger and Trial Attorney Eli Ross of the National Security Division’s Counterintelligence & Export Control Section.
The Commodity Futures Trading Commission (CFTC) has also filed a parallel civil complaint against Van Dyke, seeking restitution, disgorgement, civil monetary penalties, trading and registration bans, and a permanent injunction.
Detection and Cooperation
Polymarket flagged the suspicious activity and referred the matter to the Department of Justice, according to company CEO Shayne Coplan. The company stated that insider trading is prohibited on its platform.
Statements from Officials
Acting Attorney General Todd Blanche stated that service members are prohibited from using classified information for personal financial gain.
FBI Director Kash Patel stated that clearance holders who misuse access and knowledge will be held accountable.
U.S. Attorney Jay Clayton for the Southern District of New York characterized the alleged conduct as insider trading and stated that prediction markets are not a haven for using misappropriated information.
FBI Assistant Director in Charge James C. Barnacle Jr. stated that Van Dyke allegedly used classified information for financial gain.
CFTC Chairman Michael Selig stated that Van Dyke's actions endangered national security and put service members at risk.
President Donald Trump, when asked about the case, stated he was not familiar with it and expressed concern about betting on geopolitical events. He compared the situation to the Pete Rose gambling scandal.
Related Context
This case is the first time U.S. officials have leveled criminal charges against someone over prediction market wagers. It follows incidents where users were suspected of insider trading. In February, Israeli authorities arrested and charged two individuals for using classified information to place bets on Polymarket. On Wednesday, Kalshi fined and suspended three users allegedly candidates in the 2026 midterm elections who bet on their own races.
The case has prompted bipartisan calls for stricter regulation of prediction markets. President Trump's son, Donald Trump Jr., serves as a strategic adviser to Kalshi, and Trump's social media platform, Truth Social, is launching a prediction market called Truth Predict.