Suspected Polymarket Insiders Made $1.2 Million on U.S. Strikes on Iran

Gannon Ken Van Dyke, a U.S. Army Special Forces master sergeant, is accused of using classified information gained while planning and carrying out Operation Absolute Resolve to trade event contracts on blockchain-based Polymarket. The case is the Commodity Futures Trading Commission’s first insider-trading action involving event contracts and its first use of the “Eddie Murphy Rule” against misuse of government information. Its outcome could help determine whether such contracts qualify as swaps under the Commodity Exchange Act, shaping federal oversight of fast-growing prediction markets.

U.S. District Judge Andrew L. Carter Jr. in Manhattan on Aug. 10 allowed the Justice Department to intervene and stayed the CFTC’s civil case, filed April 23, until the parallel criminal proceeding ends. The regulator alleges Van Dyke bought more than 436,000 “Yes” shares between Dec. 30, 2025, and Jan. 2, 2026, spending about $33,000 and generating more than $404,000 in profit on contracts tied to Nicolás Maduro’s removal. Van Dyke has pleaded not guilty to five criminal counts, including commodities fraud and wire fraud.

Polymarket allows traders to use crypto assets to wager on outcomes ranging from elections to economic events, with contract prices often treated as real-time measures of collective expectations. The decentralized prediction market relies heavily on transparent blockchain records and wallet activity to establish credibility, making signs of trading on nonpublic information or coordinated bets a significant test of market integrity and a potential focus for regulators.

A Bloomberg Businessweek analysis flagged about $200 million of Polymarket trading during the first half as potentially linked to insider activity. The top 1% of profitable accounts captured more than half of all gains, while over 50% of winning wallets were created within 24 hours before placing their bets. Some traders also appeared to split positions across multiple related wallets before withdrawing proceeds through Coinbase, intensifying scrutiny of the platform’s fairness.

Polymarket is a prediction market where users trade contracts tied to the outcomes of political and international events. U.S. Army Green Beret Master Sergeant Gannon Ken Van Dyke took part in the Venezuela raid codenamed Operation Absolute Resolve and had classified information about the timing of President Nicolás Maduro’s capture. The case raises questions involving military secrets, national security and the boundaries of insider trading in prediction markets.

The U.S. Justice Department unsealed the indictment on April 23, 2026, and federal authorities arrested the 38-year-old Van Dyke the same day. Prosecutors allege he wagered about $33,034 beginning on December 27, 2025, and made approximately $409,881 after the U.S. military captured Maduro on January 3, 2026. He now faces five charges, including violations of the Commodity Exchange Act, carrying a combined statutory maximum sentence of 60 years.

Polymarket is a crypto-settled prediction market where traders can buy and sell contracts tied to political and geopolitical outcomes. The bets in question concerned whether the United States and Iran would reach a ceasefire by April 7, 2026. Profiting from nonpublic information about the negotiations would undermine market fairness and the credibility of its forecasts, but there has been no definitive finding of insider trading.

On April 8, on-chain analytics platform Lookonchain disclosed that three wallets created and funded only on April 7, with no previous on-chain activity, earned $200,525, $158,600 and $125,450, respectively, for a combined profit of $484,575. The implied probability of the “ceasefire” contract had been as low as 2.9%–10.3%. One trader entered at 13:59, while Trump did not confirm the agreement on Truth Social until 22:32.

Crypto prediction market Polymarket allows users to bet on events including wars, with outcomes determined using official records and reporting from credible media outlets. More than $17 million was wagered on whether Iran would attack Israel on March 10, underscoring how large financial stakes could distort sensitive information from conflict zones.

Times of Israel military correspondent Emanuel Fabian reported on March 10, 2026, that a missile had landed near Beit Shemesh. Users who had bet “no” then demanded that he change the report; one said he stood to lose $900,000 and issued a death threat. After the incident came to light on March 17, Polymarket said it had blocked and reported the accounts involved.

Polymarket allows users to wager crypto assets on event outcomes. Although its onchain transactions are publicly visible, the offshore platform does not require identity verification. After onchain investigator ZachXBT said he would expose insider trading at a crypto company, a market opened for users to guess the company’s identity. Ironically, advance information may itself have leaked in the market betting on an insider-trading investigation.

On Feb. 26, 2026, ZachXBT identified Axiom as the subject of the investigation, alleging that its employees may have misused internal tools to track users’ wallets. The prediction market had recorded about $40 million in trading volume since Feb. 23. Lookonchain found that at least 12 newly created wallets had bet on Axiom in advance, earning more than $1 million in total, including $411,000 for one wallet. Axiom has revoked the relevant access and is investigating a possible leak.