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Federal and state officials are drawing harder lines around prediction market trading by public employees, after a Polymarket case tied to Nicolas Maduro led to criminal charges against a US Army Special Forces soldier.
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New York Gov. Kathy Hochul acted first on the public employee side this week, signing an executive order that bans state workers from using confidential information to trade event contracts. The White House had already warned staff against similar behavior on prediction market platforms. Hochul said:
“Getting rich by betting on inside information is corruption, plain and simple. Our actions will ensure that public servants work for the people they represent, not their own personal enrichment.”
The federal case now giving that debate real weight involves Gannon Ken Van Dyke. According to ABC News, DOJ claims the special forces soldier placed more than $33,000 in Polymarket trades before the removal of Venezuelan strongman Nicolas Maduro. Prosecutors say he later made about $400,000.
Maduro and his wife were extracted by US forces in January. Soon after, traders and observers raised insider trading concerns around Polymarket contracts tied to the event. DOJ alleges Van Dyke had access to nonpublic government information and used it for personal profit.
The indictment lists several federal charges, including unlawful use of confidential information for personal gain, theft of nonpublic government information, commodities fraud, and wire fraud. Authorities also say Van Dyke tried to delete his Polymarket account after concerns about the trades became public.
The indictment said:
“Rather than safeguard that information as he was obligated to do, Van Dyke decided to use that classified information to place trades on a prediction market platform for his personal profit.
“Van Dyke subsequently tried to conceal his unlawful use of classified US Government information by attempting to obscure the source of his unlawful proceeds and to disguise his connection to the accounts linked to the illicit trades.”
Polymarket has faced other insider information claims in recent months. Markets tied to Iranian Supreme Leader Ayatollah Ali Khamenei drew similar concerns. In December, one user won 22 of 23 Google search markets on Polymarket and collected more than $1 million in one day.
Congress has also entered the debate. Rep. Ritchie Torres filed a January bill that would ban federal employees from using prediction markets, adding another layer to the growing fight over event contracts, public officials, and confidential information.