American Soldier Arrested Over Polymarket Wagers Tied To Maduro's Capture

Federal authorities have arrested an American soldier who allegedly used confidential information to place a series of wagers on the capture of then-Venezuelan leader Nicolás Maduro through the prediction market platform Polymarket.

Gannon Ken Van Dyke, a 38-year-old soldier in the U.S. Army who was involved in the planning of Maduro's capture, allegedly placed more than a dozen wagers on Polymarket tied to the operation, the Justice Department said Thursday. He was charged with unlawfully using confidential government information for personal gain, among other charges.

Van Dyke's bets totaled $33,034 and, ultimately, paid out more than $400,000, according to prosecutors.

The case underscores the swelling concern in Washington about the threat of insider trading on prediction market platforms like Polymarket and its chief rival, Kalshi. Once niche financial exchanges, the prediction markets have broken out of obscurity over the last year with a broad menu of wagers on everything from U.S. elections, sports and even the weather.

But their rise — alongside a number of presciently well-timed wagers around geopolitical events such as Maduro's capture and the war in Iran — has ignited broad concern among policymakers about the companies and their regulation. The Maduro trades on Polymarket earlier this year, which generated a flurry of headlines, were among the first to draw Congress's attention. Shortly thereafter, U.S. Attorney for the Southern District of New York Jay Clayton said he expected to see cases brought on the issue of insider trading in the prediction markets.

"Prediction markets are not a haven for using misappropriated confidential or classified information for personal gain," said Clayton, the former Securities and Exchange Commission chair whose office brought the charges against Van Dyke, in a statement. "The defendant allegedly violated the trust placed in him by the United States 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. That is clear insider trading and is illegal under federal law."

Wall Street regulators at the Commodity Futures Trading Commission also filed charges against Van Dyke, alleging that he engaged in insider trading using "classified nonpublic information."

CFTC Chair Michael Selig said in a statement that Van Dyke "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."

Van Dyke's trades occurred through Polymarket's unregulated international platform, which runs on cryptocurrency technology and is supposed to be closed off to U.S. users. According to the complaint, Van Dyke, who is a master sergeant and stationed at Fort Bragg in North Carolina, used a virtual private network to trade on the platform. Virtual private networks, or VPNs, can allow users to conceal their location online and have been used by many prediction market traders over the years to circumvent such blockades.

Polymarket was forced to wall off its international exchange from Americans after settling charges with the CFTC in 2022 that alleged the company was illegally operating in the U.S. It has since pushed to open up a second platform regulated by the CFTC — and thereby open to U.S. users — but the product remains in testing.

The company has, nonetheless, proven to be a prediction-market darling to financial and political heavyweights.

The New York Stock Exchange's parent company, Intercontinental Exchange, said in March it had invested $600 million into the company — following an early $1 billion investment. And last year, 1789 Capital — the venture capital firm that counts Donald Trump Jr. as a partner — invested in the company at undisclosed terms.

Trump Jr. also signed onto Polymarket's advisory board at the time.

In a post on X, Polymarket, which is led by CEO Shayne Coplan, said it identified a user who was traded on classified government information and referred the matter to the Justice Department. The company also noted that it cooperated in the investigation, as did prosecutors.

"Insider trading has no place on Polymarket," the company wrote. "Today's arrest is proof the system works."