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A US soldier pleaded not guilty to charges that he used classified information about the seizure of Venezuelan leader Nicolás Maduro to trade on prediction site Polymarket.
Gannon Ken Van Dyke appeared in a Manhattan courtroom on Tuesday after prosecutors said he made more than $400,000 from trading on the basis of classified information about the timing of the US military operation.
Van Dyke, an active-duty soldier at a military base in North Carolina, allegedly made roughly 13 bets on positions, including “US Forces in Venezuela” and “Maduro out” by certain dates, while he had access to classified information.
The 38-year-old is charged with the unlawful use of confidential government information for personal gain, theft of non-public government information, commodities fraud, wire fraud and “engaging in a monetary transaction in property derived from specified unlawful activity”.
He was released on $250,000 bail.
The case is an early test of the way prosecutors will treat alleged wrongdoing involving the use of prediction markets, which are growing rapidly and allow bets on outcomes that range from the Eurovision Song Contest to an Iran ceasefire extension to the price of bitcoin.
Jay Clayton, US attorney for the Southern District of New York, said last month that his office was looking at ways to bring cases involving alleged wrongdoing using prediction markets.
Van Dyke’s lawyers did not immediately respond to requests for comment.
From December, Van Dyke was involved in planning “Operation Absolute Resolve”, the mission to capture Maduro, prosecutors said.
After the military operation that made his trades successful, he transferred funds to a foreign cryptocurrency vault, then to his crypto exchange account, then to a newly created brokerage account, they said.
After reports of unusual trading surfaced, Van Dyke asked Polymarket to delete his account and changed the email address linked to his cryptocurrency exchange account to one that was not registered in his name, prosecutors said.
The Commodity Futures Trading Commission has separately filed a civil case against Van Dyke.
The US in January launched strikes in Venezuela and captured Maduro along with his wife, Cilia Flores. They were flown to the US and indicted on drug trafficking and conspiracy charges. Both have pleaded not guilty.
