Author: Bibi News

In the early morning of January 3, 2026, on the streets of Caracas, U.S. special forces, operating under the code name "Operation Absolute Resolve," launched a raid on a secret residence, swiftly capturing then-Venezuelan President Nicolás Maduro and his wife Cilia Flores.

Hours later, the White House officially announced the success of the operation. Just a week before this raid, a U.S. Army Special Forces sergeant who was directly involved in planning the operation had already placed bets on the success of this operation on a prediction market.

Military Operations with Preemptive Bets

Gannon Ken Van Dyke, 38, a U.S. Army Special Forces sergeant stationed at Fort Bragg, North Carolina, as a senior sergeant, was responsible for some tactical coordination and intelligence integration.

Since December 8, 2025, he had been deeply involved in the operation's planning, accessing highly classified intelligence, and personally signed a non-disclosure agreement to "never disclose any military operation-related secrets."

After mastering the specific timetable for the operation, on December 24, 2025, Van Dyke first submitted an account opening application to a designated contract market (DCM) authorized by the CFTC that allowed U.S. users to legally trade event contracts.

At that time, the platform already had prediction contracts related to Venezuela and Maduro's resignation. However, from December 26 to 28, he repeatedly contacted customer service for online consultation for three consecutive days but failed to successfully open an account.

Late on the night of December 26, he opened an account named "Burdensome-Mix" on Polymarket, using a VPN to bypass the platform's restrictions on U.S. users.

In the following six days, just before the military operation was launched, he placed 13 bets, investing a total of $33,034, all betting on the "YES" side, covering four core contracts:

"Will Maduro resign by January 31?" "Will U.S. troops enter Venezuela by January 31?" "Will the U.S. invade Venezuela by January 31?" "Will Trump invoke the War Powers Act against Venezuela by January 31?"

The largest single bet was $32,537, placed on the "Maduro resignation" contract, and he purchased over 436,000 "Yes" shares in total.

In the early morning of January 3, the operation successfully took place as scheduled, and all contracts were instantly settled to "YES." Van Dyke netted $409,881, with a single return rate as high as 1,242%. This amount was almost equivalent to his total income as a Special Forces sergeant over several years.

The First Qualitative Insider Trading in Prediction Markets

Hours after the operation concluded, Van Dyke began transferring funds: most of the proceeds rapidly moved to an overseas cryptocurrency treasury, then deposited into a newly opened brokerage account.

On January 6, he requested to delete his account on Polymarket, claiming "he lost access to the registered email," even changing the binding email to an address that had been registered as a backup since December 14 and was not under his name.

However, the internal team at Polymarket quickly identified this unusual transaction and did not delete the account, proactively handing over all clues to the U.S. Department of Justice. The platform's chief legal officer stated, "This platform is not anonymous; users will ultimately be found."

Shortly after the operation ended, Van Dyke's Google account also added a photo: he was dressed in U.S. military combat gear, holding a rifle, standing on the deck of a warship with three comrades, with the rising sun over the sea in the background.

On April 23, the U.S. Department of Justice officially charged Van Dyke in the U.S. District Court for the Southern District of New York with five counts: illegal use of confidential government information for personal gain, theft of unpublic information, commodities fraud, wire fraud, and illegal currency trading.

The wire fraud charge carries a maximum penalty of 20 years in prison, while the other charges carry a maximum of 10 years each, with a potential cumulative sentence of up to 60 years. This is the first time the U.S. Department of Justice has filed a criminal lawsuit regarding insider trading in prediction markets.

U.S. Attorney for the Southern District of New York, former SEC Chairman Jay Clayton, stated in a press release: "Prediction markets are not a refuge for profiteering from insider information. The defendant utilized confidential information to place bets on military operations he personally participated in for arbitrage, which is clear insider trading in violation of federal law."

Acting Attorney General Todd Blanche also added in a statement: "Prediction markets are a relatively new phenomenon, but federal laws protecting national security information fully apply." The Commodity Futures Trading Commission (CFTC) concurrently filed a civil lawsuit in the same court, seeking the return of all illegal profits, penalties, and a permanent ban on his participation in futures and derivatives trading.

The CFTC invoked Section 746 of the Dodd-Frank Act for the first time, commonly known as the "Eddie Murphy Rule," named after the 1983 movie "Trading Places," which clearly prohibits anyone from using stolen or misused government non-public information for commodity trading.

CFTC Chairman Michael S. Selig stated harshly: "The defendant was entrusted with confidential information but chose to take actions that jeopardized U.S. national security and put the lives of U.S. soldiers at risk."

Incomplete Compliance

The Van Dyke case is not an isolated incident.

In February of this year, Israeli authorities arrested a reservist and a civilian, accusing them of profiting from secret information on Israeli military operations against Iran on Polymarket. In March, the account "Magamyman" started betting approximately 71 minutes before the U.S.-Israeli joint airstrike on Iran, ultimately profiting about $553,000.

Just a day before the Van Dyke case was exposed, someone manipulated temperature sensors near Charles de Gaulle Airport with a hairdryer to control meteorological station data, profiting from weather prediction contracts.

Polymarket had reached a settlement with the CFTC in 2022 for illegally operating in the U.S., which forced it to block U.S. users, yet the restriction could still be easily bypassed with a VPN; despite the CFTC approving its compliant operations last year, the U.S. site has yet to launch fully.

Meanwhile, Donald Trump Jr. is serving as a member of Polymarket's advisory board, and his venture firm 1789 Capital has already invested in the platform; the parent company of the New York Stock Exchange, Intercontinental Exchange (ICE), also announced just in March an additional $600 million investment, having previously invested a total of $1 billion.

The structural contradictions of prediction markets have been thoroughly exposed; they solve settlement trust through blockchain but can never resolve the legitimacy of information sources.

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