US soldier Gannon Ken Van Dyke has been arrested after using his position to wager on the capture of Venezuelan leader Nicolas Maduro earlier this year.
Van Dyke participated in the operation that led to Maduro’s capture and placed bets totaling over $34,000 on Polymarket, generating a profit of over $400,000. Despite declaring it as insider trading, Polymarket continues to promote its controversial war markets in daily emails to users.
“Van Dyke participated in the planning and execution of the U.S. military operation to capture Nicolás Maduro, called ‘Operation Absolute Resolve,’ and Van Dyke used his access to classified information about that operation to personally profit,” said a statement from the US Department of Justice (DOJ).
Suspicious Trades Flagged After Maduro Capture
Van Dyke’s Polymarket account was flagged as generating a suspiciously large profit on the capture of Maduro almost immediately. Users across social media were quick to highlight the wagers, which led to a profit of $409,882.03, as seen below.
With a media frenzy ensuing, Van Dyke attempted to cover up the trades by changing his email address and asking Polymarket to delete his account.
Officially, US citizens were not allowed to trade on the markets on Polymarket’s unregulated international site. Perhaps accessing the platform through a VPN and using cryptocurrency to fund his account gave Van Dyke the illusion that he could wager anonymously.
However, Polymarket allows all users to access trading data, which means suspicious wagers are quickly highlighted on social media.
Van Dyke is facing a lengthy prison sentence. The 38-year-old has been charged with “three counts of violating the Commodity Exchange Act (CEA), each of which carries a maximum sentence of 10 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of an unlawful monetary transaction, which carries a maximum penalty of 10 years in prison,” according to the DOJ.
Prediction Markets ‘Not A Haven’ For Insider Trading
The case follows an Israeli soldier’s indictment for trading on the timing of military action in the Middle East.
“Prediction markets are not a haven for using misappropriated confidential or classified information for personal gain,” said U.S. Attorney Jay Clayton for the Southern District of New York.
Polymarket said it alerted authorities to the trades and cooperated with the investigation. A statement on X declared, “Insider trading has no place on Polymarket. Today’s arrest is proof the system works.”
The Commodity Futures Trading Commission (CFTC) also announced that it has filed a complaint against Van Dyke. The complaint seeks “restitution, disgorgement, civil monetary penalties, trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.”
Amid accusations that prediction markets have insufficient protections against insider trading, the CFTC has said it is focused on “policing fraud, abuse, and manipulation.”
“I have been crystal clear that anyone who engages in fraud, manipulation, or insider trading in any of our markets will face the full force of the law,” said Chairman Michael S. Selig. “The defendant was entrusted with confidential information about U.S. operations and yet took action that endangered U.S. national security and put the lives of American service members in harm’s way.”
Polymarket Promoting War Markets
Polymarket continues to allow users to trade on military conflicts worldwide, despite the markets being officially prohibited by the CEA.
As mentioned, these markets are listed on its international site, which is not governed by the CFTC. However, as an American citizen, Van Dyke was easily able to trade on the Maduro markets.
Not only does it allow US citizens to trade on forbidden markets, but it also actively promotes trading on conflict in daily emails to its userbase. These promotions come amid claims that insiders are profiting from the markets.
An email titled “Tehran Coup?” went out to users on Wednesday. The email promotes markets on the conflict in the same manner sportsbooks promote parlays on NFL games. It features quick links to check the odds on an Iranian coup attempt by June 30.
An email sent on April 20 had the subject line “Iranians are vibe trading the war.” The email stated, “Iran’s parliamentary speaker Ghalibaf hinted that Tehran is also day trading the war. Why not, right?“
At the same time, while saying it is happy for Iran’s parliamentary speaker to trade on markets related to the conflict, Polymarket says it opposes insider trading.
Trump Unperturbed By Insider Trading Claims
The lack of action against Polymarket appears to filter down from the top. President Donald Trump’s son, Donald Trump Jr., is an advisor to both Polymarket and Kalshi.
The President also hinted that he had no problem with soldiers “betting on their own team” in conflicts.
Asked on Thursday what he thought about Van Dyke’s wagers, Trump told reporters in the Oval Office, “That’s like Pete Rose betting on his own team.”
“Pete Rose, they kept him out of the Hall of Fame because he bet on his own team. Now, if he bet against his team, that would be no good, but he bet on his own team,” Trump said. “I’ll look into it.”
The comments are likely to be fuel to the fire for Democrats, with party members already introducing multiple pieces of legislation targeting insider trading and “death bets.” Yet, under current US laws, these are already forbidden.
Amid all the chaos, Polymarket is seeking $400 million in investment at a valuation of $15 billion.
