A U.S. Army Special Forces soldier has been charged with using classified intelligence on the Maduro raid to generate $409,000 in profits on Polymarket, in what federal prosecutors have confirmed is the first criminal insider trading case brought against a prediction market platform in the United States.
Federal prosecutors in the Southern District of New York charged Master Sergeant Gannon Ken Van Dyke, 38, of Fayetteville, North Carolina, with unlawful use of confidential government information for personal gain, theft of nonpublic government information, commodities fraud, wire fraud, and making an unlawful monetary transaction. Van Dyke was involved in the planning and execution of Operation Absolute Resolve, the classified U.S. military mission that resulted in the capture of Venezuelan President Nicolás Maduro in early January 2026.
According to the indictment, Van Dyke made approximately 13 bets totalling $33,034 on Polymarket between December 27 and January 2 — the eve of the raid on Caracas. All wagers took “Yes” positions on contracts tied to U.S. forces entering Venezuela, Maduro leaving office, a U.S. invasion of Venezuela, and President Trump invoking the War Powers Act against the country, each by January 31, 2026. The bets generated total profits of approximately $409,881.
Prosecutors allege Van Dyke subsequently attempted to conceal his identity. When press and social media reports drew attention to unusual trading in Maduro-related contracts, he asked Polymarket to delete his account, falsely claiming to have lost access to the associated email address. He also transferred the proceeds to a foreign cryptocurrency vault before depositing them into a newly created brokerage account.
The Commodity Futures Trading Commission filed parallel civil charges against Van Dyke, seeking restitution, disgorgement, civil monetary penalties, trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act. CFTC Chairman Michael S. Selig stated the case marks the first time the Commission has charged insider trading involving event contracts, and the first time it has applied the so-called “Eddie Murphy Rule” — the provision prohibiting trading on material, nonpublic information obtained from a government source in breach of a duty of trust and confidentiality.
U.S. Attorney Jay Clayton for the Southern District of New York said prediction markets “are not a haven for using misappropriated confidential or classified information for personal gain.” Polymarket, in a statement, said it had identified the account and referred the matter to the Department of Justice prior to cooperating throughout the investigation. CEO Shayne Coplan wrote on X that the platform is “grateful the DOJ officially acknowledged Polymarket’s cooperation,” adding that the transparency of on-chain markets makes compliance more effective than ever. Van Dyke was released on a $250,000 bond and ordered to appear in Manhattan federal court early next week.
League Partnerships Under the Microscope
The timing is acutely uncomfortable for three of North America’s major sports leagues. MLB announced a sponsorship, licensing, and data sharing agreement with Polymarket last month, despite prior reporting that a U.S. military member had used classified information to generate large profits on Polymarket’s international exchange. The NHL and MLS hold comparable agreements. MLB Commissioner Rob Manfred previously cited Polymarket’s market surveillance commitments as justification for the partnership, though Polymarket’s identical branding across its U.S. and international exchanges — and questions over whether those integrity provisions extend to the international platform, where the overwhelming majority of trading activity takes place — remain unresolved. MLB, the NHL, and MLS had not responded to requests for comment at time of publication.
A Pattern of Suspicious Activity
Van Dyke’s arrest is the first of its kind in the United States, but it is not an isolated incident. Israeli authorities earlier this year arrested two individuals, including a military reservist, on suspicion of using classified information to place Iran-related bets on Polymarket. Newly created accounts were also identified placing large wagers on the U.S.-Iran ceasefire shortly before President Trump publicly announced it earlier this month. Kalshi, a Polymarket competitor, this week suspended three congressional candidates for political insider trading by wagering on their own races, though it said it would not refer those cases to the Department of Justice.
The charges against Van Dyke arrive at a pivotal moment for the prediction markets sector. Sports wagers account for more than 85% of all bets on Kalshi, and Polymarket generated $25 million in fee revenue during a single four-day stretch of March Madness. The DOJ and CFTC actions represent the clearest regulatory signal yet that federal authorities intend to treat integrity violations on prediction market platforms as a serious criminal matter — a stance with significant consequences for an industry whose relationship with professional sports is rapidly deepening.