By Douglas Gillison and Anirban Sen
WASHINGTON/NEW YORK, April 24 (Reuters) – A U.S. Army soldier charged with placing bets tied to the capture of Venezuelan leader Nicolas Maduro on Polymarket was blocked from opening an account on Kalshi, a competitor, a person familiar with the matter said Friday.
The differing outcomes on rival prediction market platforms underscore the unsettled regulatory environment for a burgeoning industry that has ties to President Donald Trump’s administration.
The soldier, Master Sergeant Gannon Ken Van Dyke, a 38-year-old Army Special Forces member involved in planning Maduro’s capture, allegedly made $400,000 from a series of bets he placed in December and early January on Polymarket, which prosecutors say he accessed while masking his geographic location on the internet.
According to the complaint by the Commodity Futures Trading Commission (CFTC), the soldier allegedly tried to create an account on another unnamed event contracts platform in late December, but that platform blocked him.
The other platform was Kalshi, the source said. The source requested anonymity as the matter is confidential.
In the days leading up to Maduro’s capture on January 3, Van Dyke used classified information to place several bets on Polymarket that U.S. forces would enter Venezuela and that Maduro would be out of power, according to the complaint.
The charges are not the first time U.S. authorities have identified possible illicit conduct on Polymarket. In early 2022, the CFTC fined Polymarket $1.4 million for illegally offering event contracts on an unregistered platform.
Federal authorities later began investigating the company on suspicion of improperly allowing access to Americans, raiding the CEO’s home in 2024. Bloomberg reported last year that the CFTC and Justice Department had closed the investigation.
“The allegations further show how individuals can circumvent the restrictions prediction market platforms supposedly have in place to prevent misconduct,” said Ben Schiffrin, head of securities policy at Better Markets, which advocates for tougher regulation of Wall Street.
“That is why an investigation into whether Polymarket was abiding by its agreement not to allow access to US users was so important.”
The Justice Department referred questions to the U.S. Attorney’s office in Manhattan, where a spokesperson declined to comment. The CFTC did not immediately respond to a request for comment.
Chairman Michael Selig told lawmakers this month his agency would aggressively prosecute insider trading. The CFTC in March also began the process of crafting prediction market regulations.
Polymarket did not respond to a request for comment on Friday. The company’s chief legal officer, Neal Kumar, had said Thursday on X that Van Dyke’s arrest “proved just how easy it is to find & charge criminal insider trading when markets are onchain. It’s not anonymous — you will be found just like this guy.”
HEIGHTENED SCRUTINY
The case marks the first time that the Justice Department has filed insider trading charges involving a prediction market platform, and comes as such platforms are attracting increased scrutiny from lawmakers.
In March, both Kalshi and Polymarket updated their rules to highlight that certain types of bets, which included wagers made using confidential information and illegal tips, would not be allowed on their respective platforms. Those rules affected Polymarket’s offshore trading venue, and also its U.S.-regulated platform, which recently secured the required licenses to operate in the U.S. and is currently in beta mode.
When Van Dyke tried to open an account at Kalshi, the platform’s safeguards that include ID requirements blocked him, the source said.
Unlike other U.S.-based prediction market platforms, Polymarket’s users on its offshore platform do not have to provide any form of identification to open accounts and start trading, a separate source familiar with the situation said. Polymarket did not immediately provide comment on its account opening procedure.
Reuters could not immediately identify a defense lawyer for Van Dyke. A federal judge in North Carolina provisionally released him on $250,000 bond ahead of a court appearance on Tuesday in New York, according to the Justice Department.
(Reporting by Anirban Sen in New York and Douglas Gillison in Washington; Additional reporting by Luc Cohen; Editing by Megan Davies, Lisa Shumaker and Daniel Wallis)
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