Judge declines to dismiss soldier’s Polymarket insider trading case

Gannon Ken Van Dyke, a master sergeant in the Army Special Forces, faces decades in prison if convicted of using confidential government information about the military capture of Venezuelan President Nicolás Maduro for personal monetary gain.MANHATTAN (CN) — A New York federal judge has declined to toss a first-of-its-kind prediction market insider trading case against a U.S. Army soldier accused of netting $400,000 using insider information about the raid and capture of deposed Venezuelan President Nicolás Maduro.Gannon Ken Van Dyke, a master sergeant in the Special Forces stationed at Fort Bragg in Fayetteville, North Carolina, faces a five-count federal indictment accusing him of unlawful use of government information for personal gain, theft of nonpublic government information, wire fraud, commodities fraud and making an unlawful monetary transaction.In his motion to dismiss his criminal indictment ahead of a trial scheduled for the end of the year, Van Dyke claimed his Polymarket wagers related to the possible U.S. military capture of Maduro this past January were not illegal “swaps” as defined by federal commodities law, and additionally that the charges independently fail on constitutional grounds, including under the void-for-vagueness doctrine.In an opinion filed late Monday evening, U.S. District Judge Margaret Garnett denied Van Dyke’s motion to dismiss the charges, holding that the issue of whether prosecutors can prove that the Polymarket wagers were illegal swaps is not the “proper subject of a motion to dismiss,” and therefore cannot be resolved on Van Dyke’s motion.“But the court need not wade into the thicket of the parties’ interpretive dispute at this stage because Van Dyke’s motion can succeed only if the event contracts alleged in the indictment cannot be swaps as a matter of law, and Van Dyke has failed to make that showing,” Garnett, a Joe Biden appointee, wrote.Garnett also dismissed Van Dyke’s constitutional basis for dismissal, finding that the void-for-vagueness proposition was premature “given the focus on factual analysis.”Federal prosecutors had argued the event contracts laid out in the indictment qualified within the statutory definition of a swap, under U.S. Commodity Exchange Act (CEA) Section 1a(47)(A)(ii), as amended by the Dodd-Frank Act, because they are contracts for which payment depends on the occurrence of events — U.S. military action against Venezuela and Maduro’s removal from power— that are “associated with a potential financial, economic, or commercial consequence.”Van Dyke’s attorneys from the firms of Geragos and Geragos and Agnifilo Intrater did not immediately respond to request for comment Tuesday. He is tentatively scheduled to stand trial on Dec. 7, and faces decades in prison if convicted.The Polymarket prediction market website is displayed on a computer screen, Jan. 11, 2026, in New York. (AP Photo/Wyatte Grantham-Philips, File)Federal prosecutors on Tuesday asked Garnett to allow Department of Defense witnesses to testify “using pseudonyms and light disguises,” and that Van Dyke’s defense be precluded from eliciting any personally identifiable information at trial about them that would reveal the witnesses’ true identities.The prosecutors for the Southern District of New York also requested an order barring any courtroom sketches or other recording of the appearance of those witnesses.Federal prosecutors say Van Dyke was directly involved in Operation Absolute Resolve, the U.S. military mission that culminated in the capture of Maduro and his wife on Jan. 3. Despite signing nondisclosure agreements, he placed numerous Polymarket bets totaling around $34,000 in the days leading up to Maduro’s ouster, the government claims.When the prediction markets resolved following Maduro’s capture, Van Dyke’s shares were worth more than $400,000, prosecutors say.The Southern District of New York announced charges against Maduro in 2020, when Donald Trump-appointed U.S. Attorney Geoffrey S. Berman headed the office. Prosecutors then accused Maduro of conspiring with the Colombian guerrilla group Revolutionary Armed Forces of Colombia.Prosecutors accused Maduro and his wife of conspiring to carry out a “massive-scale drug trafficking” operation that concentrated wealth within their family.The United States claims Maduro’s involvement in the drug trafficking conspiracy goes back at least to 1999, when he was elected to the Constituent National Assembly of Venezuela, and escalated in the 2000s while he served as minister of foreign affairs.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads