U.S. prosecutors have charged active-duty soldier Gannon Ken Van Dyke with exploiting classified military intelligence to trade on Polymarket, a blockchain prediction platform. According to the U.S. prosecutors, Van Dyke made $409,000 in profit from just $33,000 in Polymarket bets. The case raises concerns over insider trading in decentralized markets and national security breaches, investigators said.
According to court filings, Van Dyke reportedly accessed sensitive intelligence during a U.S. military operation targeting Venezuelan President Nicolas Maduro. Prosecutors allege he used non-public operational details to predict outcomes on Polymarket contracts, gaining an informational advantage that translated into significant trading profits across multiple geopolitical event markets platforms involved.
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According to the statement by the United States Department of Justice, Gannon Ken Van Dyke was one of the planners and operators in “Operation Absolute Resolve,” during which Nicolas Maduro was captured in Caracas. Prosecutors believe that he used advanced knowledge to purchase “yes” Polymarket shares related to Maduro’s capture.
The allegations of insider trading in Polymarket highlight the rising concern regarding the need to regulate emerging prediction markets and decentralized markets. It raises the issues of protecting market integrity from insider trading risks and attracting further investigations in this area, which may help clarify regulatory issues.
The Commodity Futures Trading Commission (CFTC), the U.S. federal regulator overseeing prediction markets, said on Thursday it had filed a separate complaint against Van Dyke.
It is claimed that on December 26, he moved $35,000 worth of funds from his personal account to a crypto exchange just over a week before U.S. forces were due to undertake the mission to apprehend Maduro.
The investigation shows that Van Dyke used over $32,500 of the total amount of money to put down a number of wagers that he would be removed from his post. It is alleged that he placed these wagers between December 30 and January 2, with the bulk of them being on the night of January 2, which happened shortly before the first raid on Caracas began.
On the early morning of January 3, President Donald Trump published a picture on his social media page showing the Venezuelan leader in a grey sweatsuit, headphones, and a blindfold.
Van Dyke is claimed to have earned “more than $404,000 in gains” by trading in the futures market, while those trades on three other Venezuela-linked contracts brought in “more than $5,000 in gains.”
CFTC Chair Michael Selig emphasized the gravity of the charges made against him by highlighting that the defendant not only had access to sensitive information but also misused it in such a manner that the national security of the United States was at stake, as well as putting U.S. soldiers’ lives in jeopardy.
Authorities allege Van Dyke attempted to conceal his activity by requesting the deletion of his Polymarket account and changing associated email credentials. Prosecutors also suspect that he deposited his Polymarket profits into an overseas crypto wallet before transferring them to another brokerage account. These actions are considered attempts to obscure the trail of funds’ movement.
Polymarket stated that it identified suspicious trades linked to the arrest and cooperated with U.S. authorities, stating insider trading has no place on its platform. The FBI reiterated its determination to protect classified military information and enforce laws and regulations regarding the handling of national secrets and financial matters.
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