DOJ arrests soldier over Polymarket bets before Maduro capture

Gannon Ken Van Dyke, a U.S. soldier who took part in the January operation that captured Venezuela’s Nicolás Maduro and Cilia Flores, was arrested by the Department of Justice on Thursday on charges related to bets he placed on the prediction platform Polymarket. The indictment alleges he used nonpublic information about the operation to trade on the outcome.

Prosecutors in the Southern District of New York say Van Dyke placed about $33,000 in wagers on Polymarket in the hours before the mission. The indictment states he later withdrew more than $400,000 in proceeds and attempted to delete his account on the platform.

Jay Clayton, U.S. attorney for the Southern District of New York, described the alleged conduct as a violation of trust by using classified information about a sensitive military operation to place bets on its timing and outcome for profit. The indictment charges Van Dyke with three counts of violating the Commodity Exchange Act, one count of wire fraud and one count of unlawful monetary transactions. If convicted on all counts, he faces up to 60 years in prison.

Polymarket informed investigators it identified the user and referred the matter to federal authorities, and the platform cooperated with the DOJ investigation. The company issued a statement that read, “Insider trading has no place on Polymarket. Today’s arrest is proof the system works.”

The indictment notes Polymarket does not require full know-your-customer verification for all users, a policy the DOJ says complicates policing illicit activity on prediction markets. In March, Polymarket tightened its rules to explicitly classify trading by people who can influence outcomes as insider trading.

Polymarket has hosted markets tied to violent or sensitive events, including a market that predicted a nuclear detonation and a separate market on the rescue of a missing airman in Iran, which drew criticism from Representative Seth Moulton. Those examples prompted debate over platform policies and oversight.

The case is among the first major prosecutions connected to trading on event-based prediction platforms and will be heard in federal court in Manhattan, where prosecutors will present evidence supporting the charges.