Federal prosecutors on Thursday charged a U.S. Army Special Forces soldier with using classified details of the January raid that captured Venezuelan leader Nicolás Maduro to win more than $409,000 on the prediction market Polymarket, the first U.S. criminal case built on insider trading in event contracts.

The indictment against Master Sgt. Gannon Ken Van Dyke, 38, of Fort Bragg, N.C., brings the policy fight over prediction markets into federal criminal court. It lands a day after Kalshi fined three congressional candidates for trading on their own races, and it tests whether event contracts — a roughly two-year-old legal industry that the Trump administration embraced after the Biden administration tried to shut it down — can be policed the way the Commodity Futures Trading Commission polices stocks and pork bellies.

The trades

Van Dyke helped plan and execute the predawn operation in Caracas that ended Maduro's rule, prosecutors said. Between Dec. 27 and Jan. 26 he placed about 13 wagers on Polymarket, including a $32,537 bet that Maduro would be "out by January 31, 2026," $1,000 on a U.S. invasion of Venezuela, $250 on President Trump invoking the War Powers Act and $146 on U.S. forces landing in Venezuela by the end of the month, according to the indictment unsealed in the Southern District of New York. The bets were placed under pseudonyms including "Burdensome-Mix."

The $32,537 wager went in on Jan. 3, shortly before Trump announced the capture on Truth Social, CBS News reported. Hours after Maduro's arrest, Van Dyke was photographed on a warship deck in fatigues with three other service members. His winnings topped $409,000.

The cover-up

Van Dyke signed nondisclosure agreements pledging not to disclose "any classified or sensitive information" about the mission, the Justice Department said. Prosecutors allege that on Jan. 6, three days after the raid concluded, he asked Polymarket to delete his account, claiming he had lost access to his email, then changed the email tied to the account the same day. He moved most of the winnings into a foreign cryptocurrency vault and then to a new brokerage account, according to PBS NewsHour.

He left a trail anyway: Polymarket said he had registered with his personal email address. "When we identified a user trading on classified government information, we referred the matter to the DOJ & cooperated with their investigation," the company said. Neal Kumar, Polymarket's chief legal officer, wrote on X that bettors on the cryptocurrency-powered site can be identified when the company cooperates with federal investigators.

The charges

The indictment charges Van Dyke with wire fraud, commodities fraud, unlawful use of confidential government information for personal gain, theft of nonpublic government information and engaging in monetary transactions from unlawful activity. The counts carry the possibility of years in prison. The CFTC filed a parallel civil action.

"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," U.S. Attorney Jay Clayton said in the Southern District release. Clayton added in a separate statement that "Prediction markets are not a haven for using misappropriated confidential or classified information for personal gain." FBI Director Kash Patel said, "Any clearance holders thinking of cashing in their access and knowledge for personal gain will be held accountable."

Washington's whiplash

The case comes with Polymarket on its second act in Washington. The Biden administration forced the Panama-based exchange out of the United States, leaving American traders to reach the main venue through a virtual private network. The Trump administration dropped a criminal probe and cleared Polymarket to open a separately regulated U.S. exchange. Donald Trump Jr. advises both Polymarket and rival Kalshi, which on Thursday handed five-year bans to three congressional candidates who bet on themselves.

Asked about the Van Dyke case before charges were unsealed, Trump said: "Well, the whole world, unfortunately, has become somewhat of a casino." He compared the allegations to Pete Rose's baseball ban, asking, "Was he betting that they would get him, or that they wouldn't get him?" and said, "I'll look into it."

The counterpoint

On the right, Rep. Anna Paulina Luna and commentators at Outkick, the Fox News sports site, have argued the case overreaches. Outkick writer Zach Dean, citing Trump's Rose analogy, wrote that penalizing a soldier who bet on the success of his own mission resembles punishing an athlete who wagers on his own team. The defense line treats Van Dyke's trades as a vote of confidence in the troops rather than a theft of classified information — a framing that ignores the nondisclosure agreements prosecutors say he signed and the pseudonymous accounts they say he used to hide the trades.

What's next

Van Dyke, who joined the Army in 2008 and made master sergeant in 2023, was arrested Thursday; his defense attorney has not been publicly identified. His initial appearance in Manhattan will set the first test of whether classified-information prosecutions translate cleanly to event-contract markets that did not exist, in their current form, the last time Congress rewrote the commodities laws.