A U.S. special forces soldier stationed at Fort Bragg was arrested Thursday for allegedly earning over $410,000 betting on the outcome of events related to Venezuela’s Nicolás Maduro.
U.S. Soldier Accused of Insider Trading on Prediction Market
Following an operation on January 3rd involving U.S. commandos and the reported attempt to apprehend Venezuelan President Nicolás Maduro, suspicious activity was detected on the Polymarket prediction platform.
An anonymous investor made substantial bets in the weeks leading up to the operation, correctly predicting a U.S. attack on Venezuela and the ousting of Maduro.
$410,000 Profit and Cryptocurrency Transfers
The soldier, identified as Van Dyke, allegedly transferred the majority of his earnings to an offshore cryptocurrency wallet before depositing the funds into a newly created online brokerage account.
First Case of Its Kind for DOJ
According to Reuters, this is likely the first instance of the U.S. Department of Justice bringing charges related to the use of non-public information on prediction markets.
How Prediction Markets Work
Prediction markets, such as Polymarket, allow users to buy “yes” or “no” contracts related to future events spanning sports, entertainment, politics, and economics, creating opportunities for significant profits for those with inside information.
Polymarket responded to the arrest by stating it published expanded market integrity rules in March to combat the exploitation of confidential information.
Polymarket’s Cooperation with Investigation
“When we identified a user trading on government confidential information, we referred the matter to the Department of Justice and cooperated with their investigation,” the company stated.
Increased Scrutiny of Prediction Markets
The arrest comes as lawmakers increase scrutiny of prediction markets and take action against insider trading involving sensitive government information, as reported by Axios.
