The first Polymarket insider trading trial in U.S. federal court begins, and a U.S. service member refuses to plead not guilty

According to a report by Decrypt, U.S. Army Sergeant First Class Gannon Ken Van Dyke pleaded not guilty on April 29 in a federal court in New York to charges that he profited on the prediction market Polymarket by using confidential information. He was released on a $250k bail bond, ordered to surrender his passport, and restricted from traveling. The prosecutors said this is the first time the federal government has brought a lawsuit related to activity on a prediction market.

Allegations and Event Timeline

According to a Decrypt report, the 38-year-old Van Dyke, who is stationed at Fort Bragg in North Carolina, was accused of using his prior knowledge of “Operation Absolute Resolve” to place at least 13 bets on Polymarket between December 27, 2025, and January 2, 2026. The total amount wagered was approximately $33,034, placing bets on contracts related to the U.S. military entering Venezuela and Venezuelan President Nicolás Maduro being removed from office.

According to Decrypt, after a January 3, 2026 raid, Van Dyke’s above bets generated $409,881 in profits. Subsequent developments are as follows:

After the operation: Van Dyke allegedly transferred the profits into an offshore crypto vault that could earn interest

January 16, 2026: The funds were transferred to a newly opened brokerage account

A few days after the operation ended: Van Dyke allegedly asked Polymarket to delete his account, claiming he could not access his email

According to Decrypt, before the Polymarket activity described above, Van Dyke had been rejected by the competing prediction platform Kalshi for opening an account at the end of December 2025.

Positions of the Federal Prosecutors and the Department of Justice

According to Decrypt, U.S. Federal Prosecutor Jay Clayton said in a statement last Thursday: “Prediction markets are not a place to profit for private gain by misappropriating confidential information. The defendant is alleged to have used sensitive information about a military operation to gamble on the timing and outcomes of that operation, in order to make a windfall—thereby betraying the trust the U.S. government placed in him.”

According to Decrypt, Acting U.S. Attorney General Todd Blanche also emphasized that federal laws designed to protect national security information fully apply to prediction markets, and noted that broad access to prediction markets is a relatively new phenomenon.

Trump’s Public Comments About Prediction Markets

According to Decrypt, U.S. President Donald Trump told reporters last Thursday that he “never really was a big fan” of prediction markets, saying they “turn the entire world into some kind of a casino.” However, when Decrypt on Saturday sought confirmation from Trump about the remarks, he recanted the above statement and said: “Well, I don’t know. I know some very smart people. They like that point of view, but they also don’t agree.”

Frequently Asked Questions

What was the trial schedule for this case, and what defense position did the defendant take?

According to Decrypt’s April 29, 2026 report, on Tuesday (April 29, 2026), U.S. Army Sergeant First Class Gannon Ken Van Dyke pleaded not guilty to the relevant charges in federal court in New York. He was released on a $250k bail bond and had restrictions placed on travel and required surrender of his passport.

What specific conduct and amounts was Van Dyke accused of?

According to Decrypt, Van Dyke was accused of using confidential information from “Operation Absolute Resolve.” Between December 27, 2025, and January 2, 2026, he placed bets totaling approximately $33,034 on Polymarket, betting on contracts related to the U.S. military entering Venezuela and Maduro being removed from office. In the end, he earned $409,881 in profits.

What is the significance of this case as a federal legal precedent?

According to Decrypt, citing a statement by U.S. federal prosecutors, this case is the first time the federal government has brought a lawsuit related to prediction market activity. Acting Attorney General Todd Blanche also confirmed that federal national security laws fully apply to prediction markets.