U.S. military active-duty non-commissioned officer arrested! Suspected of insider trading related to a Venezuela operation, netting $400,000 in profit from the prediction market

A U.S. military special forces non-commissioned officer has been charged by the U.S. Department of Justice. Authorities allege that he used confidential information relating to an operation to place inside bets on Polymarket regarding the capture of Venezuelan President Nicolás Maduro, profiting more than $400,000.

Special Forces NCO Involved in Classified Bets, Profiting Over $400,000 from Military Operations

The U.S. Department of Justice has announced that an active-duty U.S. military special forces non-commissioned officer, Gannon Ken Van Dyke, is accused of using classified military information to place bets on the prediction market platform Polymarket and earn profits, and has been formally charged.

According to prosecutors, from December 2025 to January 2026, Van Dyke placed 13 consecutive bets on events including whether Nicolás Maduro, the former president of Venezuela, would be detained by the U.S. military, investing a total of approximately $33,000, and ultimately earning approximately $400,000 in profit.

The key point in the case is that the officer himself participated in the planning and execution of the relevant military operation, making him a person with access to highly sensitive intelligence. Prosecutors determined that he used non-public government information for trading, which constitutes classic insider trading and violates federal law.

Military Operations and Prediction Markets Intersect, Insider Trading Explicitly Criminalized for the First Time

Based on the indictment, after setting up an account, the officer began placing bets on events such as “whether the U.S. military would enter Venezuela” and “whether Maduro would be successfully detained.” In the early morning of January 3, 2026, after the U.S. military completed the operation and announced the results to the public, his bets were cashed out quickly, generating returns far higher than the market average.

This abnormal profit attracted attention at the time, but only after the investigation went deeper was it confirmed that the activity was connected to personnel inside the military. The Justice Department emphasized that even though prediction markets operate on blockchain and crypto assets, that does not mean they can evade existing financial and securities regulations.

The case is seen as the first instance in the U.S. where “using government secrets to trade on crypto prediction markets” has been explicitly classified as insider trading, with the criminal justice system directly intervening.

Attempts to Conceal Identity Failed; Transactions on the Blockchain Still Tracked

Prosecutors said that after profiting, Van Dyke attempted to conceal his identity, including requesting the platform to delete his account and changing his email information, claiming that he could no longer access the original account. However, the related actions only deepened investigators’ suspicions.

In terms of handling the funds, the officer converted his profits into stablecoins and transferred them to an offshore wallet via a cross-chain bridge, then gradually exchanged them for fiat currency and deposited them into a brokerage account. Even so, transaction records on the blockchain still provided a complete trail of the funds, becoming one of the key pieces of evidence for prosecutors.

As for the platform, it said that after detecting suspicious transaction patterns, it proactively reported to the U.S. Department of Justice and cooperated with the investigation, emphasizing that prediction markets are not a “gray area” where confidential information can be abused.

National Security and Financial Regulation Collide, Prediction Markets Face Another Round of Scrutiny

In addition to criminal charges, the CFTC has also filed a civil lawsuit, accusing him of violating the Commodity Exchange Act and seeking to recover illegal proceeds and related penalties.

U.S. regulators emphasized that this case involves not only financial violations, but also national security risks. Officials noted that turning military operations into speculative tools could jeopardize operational confidentiality and even affect the safety of personnel on the front lines.

After the incident came to light, Congress has begun discussing whether to restrict government officials and related personnel from participating in prediction market trading, especially on issues involving policy or military operations.

As blockchain-based prediction markets expand in scale, problems such as information asymmetry and regulatory gaps are gradually becoming more apparent. This case shows that when financial innovation intersects with national security, existing legal frameworks are starting to extend to new forms of markets, bringing stricter compliance pressures to the overall Web3 ecosystem.

This article was generated by the Crypto Agent compiling information from various parties and is reviewed and edited by “Crypto City.” It is still in training and may contain logical biases or information errors. The content is for reference only—do not treat it as investment advice.