Kalshi said the U.S. Army Special Forces soldier who was indicted and arrested this week for betting on the January raid that led to Venezuelan dictator Nicolas Maduro‘s capture was banned from the online prediction market platform.
On Thursday, federal prosecutors accused Master Sgt. Gannon Ken Van Dyke, 38, of using classified government information to make over $400,000 in profits from betting on the U.S. mission in Venezuela through Polymarket, another prediction market. He was charged with wire fraud and other charges stemming from the alleged scheme to financially benefit himself.
Kalshi blocked Van Dyke from opening an account in late December, Reuters reported. The U.S. military operation, called Operation Absolute Resolve, occurred on Jan. 3. The reason he was blocked remains unclear.
The Commodity Futures Trading Commission filed a civil lawsuit against Van Dyke on Thursday, alleging he applied to open an account with an unnamed “designated contract market” on Dec. 24. A few days later, he contacted the company’s customer support service after he was unable to open his account. That unnamed platform was Kalshi, according to Reuters.
Van Dyke allegedly made 13 bets with more than $33,000 from Dec. 27 to Jan. 2, the night before Maduro’s capture. The U.S. military transported the Venezuelan leader and his wife to Manhattan, where they will face trial for drug trafficking and other federal charges.
Van Dyke is ordered to appear in the same court where Maduro and his wife were indicted on Tuesday.
The soldier appeared in federal court Friday in Raleigh, North Carolina, after he was arrested while stationed at Fort Bragg. Following his court appearance, he was released from jail on an unsecured $250,000 bond.
Polymarket said it had notified the Department of Justice about Van Dyke’s trading of sensitive classified information, leading to his arrest.
“Grateful the DOJ officially acknowledged Polymarket’s cooperation on this case,” Polymarket CEO Shayne Coplan posted on X.
“Noise aside, the reality is we work proactively with all relevant authorities on any suspicious activity on our marketplace,” he wrote. “We flagged this, referred it, and cooperated throughout the process. This happens constantly behind the scenes, despite what many are led to believe.”
Van Dyke’s arrest is the latest high-profile case that lawmakers are using to justify cracking down on insider trading. Kalshi and Polymarket, the world’s two leading prediction market platforms, say they explicitly ban insider trading and have taken steps to combat the problem.
For instance, Kalshi fined and suspended three political candidates this week for betting on their own congressional races. Those political figures were Minnesota Democratic congressional candidate and state Sen. Matt Klein, former Texas Republican congressional candidate Ezekiel Enriquez, and independent Virginia Senate candidate Mark Moran.
Meanwhile, Congress is taking the lead in prohibiting insider trading among its own ranks.
MORENO SEEKING TO BAN SENATORS FROM TRADING ON PREDICTION MARKETS
On Friday, Sen. Bernie Moreno (R-OH) introduced a resolution that would amend Senate rules to prohibit members from entering or offering to enter any “agreement, contract, or transaction that provides for any purchase, sale, payment, or delivery” dependent on the outcome of a specific event.
Five Democratic senators have a similar bill seeking to prevent the president, vice president, and members of Congress from engaging with event contracts.