Soldier’s arrest in alleged Polymarket bet spotlights risks for military

Soldier’s arrest in alleged prediction market bet spotlights risks for military

The arrest of a U.S. soldier accused of using classified information to place a bet on Polymarket on the capture of Venezuelan President Nicolás Maduro is stoking new fears over how betting markets could threaten national security in high-stake situations. 

Lawmakers have raised concerns for months over the legal and ethical dangers surrounding prediction markets, and the arrest of Army soldier Gannon Ken Van Dyke could be the most high-profile case of those fears coming to pass.

Popular betting markets maintain they have mechanisms to prevent insider trading, but national security experts say this may not be enough to prevent adversaries from taking advantage of the public indicators in real time. 

“The issue isn’t the soldier ‘betting on himself’ it’s that adversaries can read the order book. Prediction markets on military ops are a real-time intelligence feed for our enemies,” said Alex Goldenberg, a fellow at the Rutgers University Miller Center on Community Protection and Resilience. 

Van Dyke, a soldier stationed at Fort Bragg who was involved with planning the operation, was charged with using confidential government information for personal gain, the Department of Justice announced Thursday.

Federal prosecutors alleged Van Dyke placed about $33,000 worth of bets about U.S. operations in Venezuela and Maduro’s ouster between Dec. 27 and Jan. 2 prior to the Jan. 3 capture of Maduro and his wife. 

Van Dyke allegedly made more than $400,000 in profits from wagers and then attempted to conceal his identity by asking Polymarket to delete his account. He faces three counts of violating the Commodity Exchange Act, one count of wire fraud and one count of an unlawful money transaction.

“Noise aside, the reality is we work proactively with all relevant authorities on any suspicious activity on our marketplace,” Polymarket CEO Shayne Coplan said Friday. “We flagged this, referred it, and cooperated throughout the process. This happens constantly behind the scenes, despite what many are led to believe.”

Accusations of insider trading emerged for several events in recent months, including bets over a ceasefire between the US and Iran, weather station tampering, the Nobel Peace Prize winner or Congressional races.

“All it takes is monitoring for patterns that deviate from established norms,” said former Air Force Secretary Frank Kendall, when asked how prediction markets can be useful to adversaries. 

Read more in a full report at TheHill.com.

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