Green Beret pleads not guilty to betting on his own mission

(The Center Square) – A U.S. Army Special Forces soldier who allegedly used classified military intelligence to place winning bets on a prediction market platform pleaded not guilty Tuesday in Manhattan federal court.

Prosecutors say the case represents the first-ever insider trading prosecution involving event contracts, and one that lands at a fraught moment for the fast-growing prediction market industry.

Gannon Ken Van Dyke, 38, of Fayetteville, North Carolina, appeared before U.S. District Judge Margaret M. Garnett in the Southern District of New York and entered his plea on five federal counts: unlawful use of confidential government information, theft of nonpublic government information, commodities fraud, wire fraud, and making an unlawful monetary transaction. He faces a maximum of 60 years in prison if convicted on all counts.

A pretrial conference is scheduled for June 8.

Van Dyke appeared with retained private counsel, attorneys Zach Intrater and Tina Glandian, replacing the Federal Public Defender who represented him at his initial appearance in North Carolina last week. He was released on a $250,000 unsecured bond, with travel restricted to federal districts in North Carolina, New York, and California. He surrendered his passport to pretrial services Tuesday.

According to the criminal indictment and a parallel civil complaint filed by the Commodity Futures Trading Commission, Van Dyke was a Master Sergeant with U.S. Army Special Forces stationed at Fort Bragg and was directly involved in planning and executing Operation Absolute Resolve — the January special forces mission that captured former Venezuelan President Nicolás Maduro and his wife, Cilia Flores, at a residence in Caracas.

On Dec. 8, 2025, the same day he signed a nondisclosure agreement regarding Western Hemisphere operations, Van Dyke was read into the classified details of the mission. Within days, according to the CFTC complaint, he attempted to open an account at a separate CFTC-licensed prediction market platform around Dec. 24, before turning to Polymarket when that application stalled. On Dec. 26, he transferred $35,000 from his personal bank account to a cryptocurrency exchange, created a Polymarket account using a VPN routed through a foreign exit node to mask his location, and began trading under the alias "Burdensome-Mix."

What followed was a calculated accumulation. The "Maduro out by January 31" contract was trading below 13 cents per share as late as 1:15 a.m. on Jan. 3, a price that reflected the public's near-total ignorance of what Van Dyke already knew. More than 13 separate transactions between Dec. 27 and the evening of Jan. 2, he spent approximately $32,500 buying "YES" shares across four Venezuela-related contracts, amassing more than 436,000 shares at an average price of about 7 cents each.

In the predawn hours of Jan. 3, U.S. special forces apprehended Maduro. At 4:21 a.m., President Trump announced the operation on TruthSocial. Within four minutes, the "Maduro out" contract spiked from $0.375 to $0.955. It resolved to "YES" at $1.00 per share at 7:14 a.m. Hours later, at approximately 5:45 a.m., a photograph was taken of Van Dyke – in military fatigues, carrying a rifle, on what appears to be the deck of a ship at sea – and uploaded to his Google account. His total profit: approximately $409,881, prosecutors said.

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Prosecutors say Van Dyke moved quickly to obscure his tracks. On Jan,. 3, he transferred the bulk of his winnings – about $437,859 in cryptocurrency – to a foreign cryptocurrency vault. On Jan. 15, he converted the proceeds to $444,209 in U.S. dollars and deposited them into his personal bank account at a Texas-based financial institution. As of April 21, about $415,511 remained in a brokerage account prosecutors have identified for forfeiture, alongside $50,066 in a USAA Bank account held in his name.

On Jan. 6, as news reports flagged the unusual trading pattern on Maduro-related contracts, Van Dyke asked Polymarket to delete his account, falsely claiming he had lost access to his email address. That same day, he changed the email registered to his cryptocurrency exchange account to one created under a different name on Dec. 14, 2025, more than a week before his first trade.

The concealment effort ultimately failed. Polymarket said it independently detected the suspicious activity and referred the matter to the Justice Department.

"When we identified a user trading on classified government information, we referred the matter to the DOJ and cooperated with their investigation," the company wrote on X. "Today's arrest is proof the system works."

The CFTC filed its civil complaint the same day as the criminal indictment, invoking for the first time what traders call the "Eddie Murphy Rule" – a provision of the Commodity Exchange Act, named after the 1983 film "Trading Places" – which prohibits federal employees from trading on nonpublic government information. The civil case seeks disgorgement of all profits, civil monetary penalties, and a permanent ban on futures and swaps trading.

"This case marks the first time the CFTC has charged insider trading involving event contracts," said CFTC enforcement director David Miller. "The division will continue to be vigilant in policing the illegal use of inside information in the prediction markets and other markets within the CFTC's jurisdiction."

The prosecution lands at a precarious moment for Polymarket and the broader prediction market industry. The CFTC has spent recent weeks suing Arizona, Connecticut and Illinois in defense of the federal legitimacy of prediction markets, arguing that Congress granted the agency exclusive authority to oversee event contracts and that states should back off.

That argument rests in part on the promise that federal oversight is sufficient.

State regulators who have argued that prediction markets cannot police themselves now have both a cautionary tale and a potential counterargument to consider. The case is being prosecuted by the Securities and Commodities Fraud Task Force and National Security and International Narcotics Unit of the U.S. Attorney's Office for the Southern District of New York, with assistance from the Justice Department's Counterintelligence and Export Control Section.