Gannon Ken Van Dyke, a U.S. soldier indicted for allegedly betting on the ousting of Venezuelan leader Nicolas Maduro through Polymarket, maintains that the charges against him are "baseless" and should be dismissed.
In a recent motion filed to contest the allegations by the Commodity Futures Trading Commission (CFTC), his legal team argues that the agency is exceeding its jurisdiction and asserts that the contracts related to Maduro’s exit are not swaps as defined by the Commodity Exchange Act (CEA).
The motion states, "The event contracts at issue were merely geopolitical bets concerning whether Maduro would be 'out' — removed from power — at any point during a specified timeframe. Such geopolitical bets are not ‘swaps’ subject to the Commodities Exchange Act, and transactions related to such event contracts cannot support liability under" CFTC regulations.
Van Dyke's defense does not dispute that he placed the wagers; rather, it challenges the CFTC’s authority to regulate these types of bets.
Besides the civil lawsuit from the CFTC, Van Dyke also faces criminal accusations of violating the CEA, wire fraud, and engaging in an unlawful monetary transaction, with a potential maximum sentence of 60 years in prison. He pleaded not guilty following his indictment in April and was released on a $250,000 bond.
Despite the CEA's prohibition on markets related to warfare, Polymarket is still promoting betting markets on various global conflicts after Van Dyke's arrest.
Prosecutors allege that he placed more than $33,000 in wagers on Maduro’s political fate, leading to profits exceeding $400,000. "Van Dyke was involved in the planning and execution of Operation Absolute Resolve, a military operation to capture Maduro, and had access to sensitive, nonpublic, classified information regarding that operation," stated the Department of Justice (DOJ) in a press release.
U.S. Attorney Jay Clayton from the Southern District of New York remarked, “The defendant allegedly betrayed the trust placed in him by the United States Government by exploiting classified information about a sensitive military operation to profit from bets on its outcome and timing. This constitutes clear insider trading, which is illegal under federal law.”
He added that those given the responsibility to protect national secrets must safeguard them and serve their country rather than use confidential insights for personal gain, asserting that the Office intends to hold accountable those who misuse classified information to threaten national security.
In addition to his military duties, Van Dyke managed a property business, Better Homes, alongside his wife, which is described as a "small veteran-owned property management company." Reports indicate that he owns at least five properties listed for rent on Airbnb. One of his most recent acquisitions was a $340,000 three-bedroom home, purchased 20 days after Maduro's alleged capture.
His former social media profiles, which highlighted his business ventures over his military career, have been deleted amid the controversy.
This case marks the CFTC's first instance of filing charges regarding insider trading involving event contracts, and it has adopted what is informally known as the "Eddie Murphy Rule" for these charges. This rule, named after Murphy's 1982 film *Trading Places*, pertains to the prohibition of insider trading through the misuse of government-held information.
CFTC Chairman Michael Selig stressed the agency's commitment to combating insider trading in announcing the complaint against Van Dyke. He stated, “I have been crystal clear that anyone who engages in fraud, manipulation, or insider trading in any of our markets will face the full force of the law. The defendant, entrusted with confidential information regarding U.S. operations, acted in ways that jeopardized national security and put the safety of American service members at risk.”
In a related case, an Israeli military official is also facing charges for using insider information to trade on war-related markets at Polymarket.
