A U.S. soldier has been arrested and indicted on five criminal counts for allegedly using classified information about a military operation targeting Venezuelan President Nicolas Maduro to place more than $400,000 in winning bets on Polymarket, the blockchain-based prediction market built on Polygon.
Five Charges Stemming From Classified Intelligence
The Southern District of New York indictment identifies the soldier as Gannon Ken Van Dyke, alleging he was involved in the planning and execution of Operation Absolute Resolve from December 8, 2025 through January 5, 2026. During that period, Van Dyke had access to sensitive, nonpublic, classified information about the operation, according to the indictment.
Van Dyke traded Maduro- and Venezuela-related Polymarket contracts on 13 separate occasions between December 27, 2025 and January 2, 2026. After the public announcement of Maduro’s capture on January 3, 2026, Polymarket resolved several relevant contracts to YES, and Van Dyke ultimately profited approximately $409,881.
The charges include unlawful use of confidential government information for personal gain, theft of nonpublic government information, commodities fraud, wire fraud, and making an unlawful monetary transaction. The case is an arrest and indictment, not a conviction.
The CFTC’s First ‘Eddie Murphy Rule’ Case
In a parallel civil complaint filed on April 23, 2026, the Commodity Futures Trading Commission said Van Dyke bought more than 436,000 YES shares of the “Maduro Out by January 31, 2026?” contract and generated more than $404,000 in profits. The CFTC described the case as its first insider-trading action involving event contracts and its first application of the so-called “Eddie Murphy Rule,” which prohibits trading on misappropriated government information.
The regulatory context matters for crypto-adjacent platforms. Previous enforcement actions, including the DOJ’s investigation into Polymarket’s Maduro-linked betting activity, have drawn attention to the intersection of prediction markets and national security. Polymarket has publicly stated that it cooperated with the DOJ investigation.
$66 Million in Combined Event Volume
The scale of the markets Van Dyke allegedly exploited is significant. Polymarket’s “Maduro out by…?” event page shows the January 31, 2026 outcome resolved Yes with $10,966,929 in volume for that specific outcome and $56,616,275 in total event volume. A related “US forces in Venezuela by…?” market recorded $9,435,672 in total event volume.
Combined, the two event markets attracted more than $66 million in trading activity. The contracts were published to Polygon and settled in USDC.e, linking the case directly to blockchain infrastructure rather than traditional financial rails.
For readers tracking how institutional flows are reshaping crypto markets, the Van Dyke case introduces a different kind of risk: classified government intelligence being weaponized for profit on decentralized platforms that operate largely outside traditional market-surveillance frameworks.
What This Means for Prediction Market Oversight
The dual DOJ-CFTC action signals that U.S. regulators view prediction markets as falling within existing commodities and fraud enforcement authority. The CFTC’s use of the Eddie Murphy Rule, a provision originally designed for traditional commodity markets, extends that framework to blockchain-based event contracts for the first time.
The case raises questions about how platforms like Polymarket can detect information asymmetry in markets tied to geopolitical events. Unlike equities markets, where insider-trading surveillance is mature, prediction markets lack comparable monitoring infrastructure. The combination of an arrest tied to a politically sensitive military operation and six-figure profits from classified intelligence is likely to intensify scrutiny.
As stablecoin infrastructure expands into regulated jurisdictions, the compliance expectations for platforms settling in USDC.e and operating on public blockchains may tighten. The Van Dyke indictment could become a reference point for future enforcement actions targeting information-based manipulation on decentralized prediction markets.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
