US special forces soldier asks court to dismiss Polymarket insider trading case
A soldier accused of using classified military intelligence to profit from trades on Polymarket argues that prosecutors are relying on an unprecedented interpretation of federal law.
US.- A special forces soldier charged with using classified military intelligence to profit from trades on Polymarket has asked a federal court to dismiss the case, arguing that prosecutors are attempting to criminalise conduct that is not prohibited under existing law.
Master Sgt. Gannon Ken Van Dyke was indicted in April on three counts of violating the Commodity Exchange Act (CEA), as well as wire fraud and conducting an unlawful monetary transaction. The Department of Justice has described the prosecution as the first insider trading case involving a prediction market.
According to prosecutors, Van Dyke used confidential information about the US operation to capture Venezuelan leader Nicolás Maduro to place successful trades on Polymarket. They allege he earned approximately $409,000 from an initial investment of around $33,000.
The contracts reportedly included predictions on whether Maduro would be removed from power before the end of January 2026 and whether US forces would enter Venezuela. Days after the operation, Van Dyke was photographed aboard the USS Iwo Jima, the ship that transported Maduro to the United States.
In a 51-page motion filed on July 31, Van Dyke’s lawyers argue that the indictment relies on an unprecedented interpretation of federal law and should be dismissed. “The government indicted Gannon Van Dyke using two theories: one, novel, never before prosecuted, and unsupported by the law; the other, already rejected by the Second Circuit,” the defense wrote.
A key issue is whether Polymarket’s event contracts should be considered “swaps” under the Commodity Exchange Act. The defence argues that Congress designed the law to regulate financial derivatives used to manage commercial risk, not bets on future events. The motion also says the government’s interpretation would greatly expand federal oversight of betting markets, allowing financial regulators to oversee wagers on elections, politics and other future events.
Van Dyke’s lawyers also ask the court to dismiss the wire fraud charge, arguing that confidential military planning information is not considered “property” under federal wire fraud law. They say the money laundering charge should also be dismissed because it depends on the wire fraud allegation.
Finally, the defence argues that if trading on confidential government information on prediction markets is to be banned, Congress should pass legislation that clearly establishes those rules instead of relying on prosecutors to stretch existing laws. If convicted on all five counts, Van Dyke faces a maximum sentence of 60 years in federal prison.
