U.S. military soldiers illegally profited $400k in the prediction market

On the early morning of January 3, 2026, on the streets of Caracas, U.S. special forces with the operation code “Operation Absolute Resolve” raided a secret residence, quickly taking control of Venezuela’s then-president Nicolás Maduro and his wife, Cilia Flores.

Hours later, the White House officially announced the success of the operation. Just one week before this raid, a U.S. special forces sergeant directly involved in planning the operation had already placed bets predicting the victory of this mission on the prediction market.

Pre-betting Military Action

Gannon Ken Van Dyke, 38 years old, U.S. Army special forces sergeant, stationed at Fort Bragg, North Carolina. As a senior sergeant, he was responsible for part of the tactical coordination and intelligence integration.

Since December 8, 2025, he had been deeply involved in planning the operation, accessing highly classified non-public intelligence, and personally signing a confidentiality agreement that stated “Never disclose any military operation secrets.”

After mastering the specific schedule of the operation, on December 24, 2025, Van Dyke first submitted an account opening application to a designated contract market (DCM) that was officially licensed by the CFTC and permitted U.S. users to legally trade event contracts.

At that time, the platform had already launched prediction contracts related to Venezuela and Maduro’s ousting. But from December 26 to 28, he repeatedly contacted customer service online for three consecutive days, but was unable to successfully open an account.

Late at night on December 26, 2025, he created an account named “Burdensome-Mix” on Polymarket, using a VPN to bypass platform restrictions on U.S. users.

Over the following six days, just before the military operation was launched, he placed 13 bets, totaling $33,034, all on the “YES” side, covering four core contracts:

“Maduro will step down before January 31?” “U.S. troops will enter Venezuela before January 31?” “U.S. will invade Venezuela before January 31?” “Trump will invoke the War Powers Act against Venezuela before January 31?”

His largest bet was $32,537 on the “Maduro steps down” contract, buying over 436k “YES” shares in total.

In the early morning of January 3, the operation succeeded as scheduled, and all contracts instantly settled as “YES.” Van Dyke netted $409,881, with a single bet return rate of 1,242%. This amount was nearly equivalent to his total income as a special forces sergeant over several years.

Insider Trading in Prediction Markets First Qualitative

A few hours after the operation, Van Dyke began transferring funds: most of the profits were quickly moved into overseas cryptocurrency wallets, then deposited into newly opened brokerage accounts.

On January 6, he applied to Polymarket to delete his account, claiming “lost access to the registered email,” even preemptively changing the account’s bound email to an alternate address registered under a different name back on December 14.

But Polymarket’s internal team quickly flagged this suspicious transaction and did not delete the account, instead transferring all clues to the U.S. Department of Justice. The platform’s chief legal officer stated: “This platform is not anonymous; users will eventually be found.”

Not long after the operation, a photo appeared in Van Dyke’s Google account: he was dressed in military combat gear, holding a rifle, standing on the deck of a warship with three comrades, with the sunrise over the sea in the background.

On April 23, the U.S. Department of Justice formally charged Van Dyke in the Southern District of New York federal court with five counts: illegal use of confidential government information for personal gain, theft of non-public government information, commodities fraud, wire fraud, and illegal currency transactions.

Among these, wire fraud faces up to 20 years in prison, with the others each up to 10 years, totaling a potential sentence of up to 60 years. This is the first time the U.S. Department of Justice has filed criminal charges against insider trading in prediction markets.

U.S. Attorney for the Southern District of New York and former SEC Chairman Jay Clayton stated in a release: “Prediction markets are not a safe haven for abusing confidential information for profit. The defendant exploited confidential information to bet on military operations he was personally involved in, which is clear insider trading and violates federal law.”

Acting Deputy Attorney General Todd Blanche also added in a statement: “Prediction markets are a relatively new phenomenon, but federal laws protecting national security information are fully applicable.” The CFTC also filed a civil suit in the same court, demanding the return of all illegal profits, payment of fines, and a permanent ban on participation in futures and derivatives trading.

For the first time, the CFTC invoked Section 746 of the Dodd-Frank Act, known as the “Eddie Murphy Rule,” named after the 1983 film “Trading Places,” explicitly prohibiting anyone from trading commodities using stolen or misused government non-public information.

CFTC Chairman Michael S. Selig harshly stated: “The defendant was entrusted with confidential information but took actions that jeopardize U.S. national security and put American soldiers’ lives at risk.”

Unfinished Compliance

Van Dyke’s case is not an isolated incident.

In February this year, Israeli authorities arrested a reservist and a civilian, accusing them of profiting from using classified information about Israeli military operations against Iran on Polymarket. In March, the account “Magamyman” began betting about 71 minutes before the U.S.-Israel joint airstrike on Iran, ultimately profiting about $553k.

Just one day before Van Dyke’s case was exposed, someone used a hairdryer to heat a temperature sensor near Charles de Gaulle Airport, manipulating weather station data to arbitrage weather prediction contracts.

Polymarket had already settled with the CFTC in 2022 for operating illegally in the U.S., resulting in a ban on U.S. users, though VPNs could easily bypass this; despite the CFTC approving its compliance operation last year, its U.S. site has yet to fully launch.

Meanwhile, Donald Trump Jr., son of former President Trump, serves as an advisor to Polymarket, whose venture capital firm 1789 Capital has invested in the platform; the Intercontinental Exchange (ICE), parent company of the NYSE, announced an additional $600 million investment in March, having already invested $1 billion.

The structural contradictions of prediction markets have been fully exposed: they solve settlement trust through blockchain but can never legitimize the sources of information.