The U.S. Commodity Futures Trading Commission (CFTC) has entered the criminal case involving U.S. Army soldier Gannon Ken Van Dyke, whose Polymarket trades allegedly generated about $409,881 using sensitive government information.
On Aug. 24, federal Judge Margaret Garnett approved the CFTC’s request to submit an amicus brief, allowing the regulator to present its interpretation of federal commodities law in the criminal proceedings.
Van Dyke’s defense had opposed the filing, arguing that the CFTC was attempting to bolster its regulatory position in a criminal case while its separate civil lawsuit against him remains on hold.
The judge rejected the defense request to block the filing but indicated that the CFTC’s arguments would receive appropriate consideration. Van Dyke has pleaded not guilty.
Key points
- The CFTC can now submit its arguments regarding Polymarket’s event contracts.
- Van Dyke can respond to new arguments in a filing of up to 10 pages by Sept. 9, 2026.
- Prosecutors allege that 13 Polymarket trades produced roughly $409,881.
- The defense maintains that geopolitical prediction contracts are wagers, not federally regulated swaps.
- The CFTC’s separate civil case remains paused while the criminal prosecution proceeds.
CFTC Defends Its Interpretation of Polymarket Contracts
At the center of the dispute is whether Polymarket contracts connected to Venezuela should be treated as swaps under the Commodity Exchange Act or simply as prediction-market wagers.
The CFTC argues that certain event contracts can fall within the definition of swaps when their value is linked to events capable of producing financial, economic or commercial consequences.
In its civil complaint, the regulator pointed to potential effects on areas such as Venezuelan bonds, oil markets and the country’s currency.
Van Dyke’s attorneys take a different position. They argue that the contracts represented geopolitical predictions rather than financial derivatives and did not depend on an underlying financial instrument or commercial transaction.
The defense has also challenged the application of CFTC Rule 180.1, which addresses fraudulent conduct involving swaps, arguing that the rule should not support the commodities-fraud allegations in this case.
The court has not yet ruled on either interpretation.
September Deadline Adds Another Layer to the Case
Judge Garnett has formally included the CFTC’s proposed brief in the criminal case record.
The order does not determine whether the Polymarket contracts legally qualify as swaps, nor does it resolve whether the criminal charges will ultimately proceed.
Van Dyke and prosecutors have until Sept. 9 to address any arguments raised by the CFTC that were not already covered in their existing filings. Any additional response is limited to 10 pages.
The court’s eventual decision could have implications beyond Van Dyke’s case. A ruling that limits the CFTC’s interpretation could affect the agency’s ability to apply federal derivatives regulations to certain prediction-market contracts.
Van Dyke’s trial is currently scheduled on a tentative basis for Dec. 7, with a status conference expected Sept. 28. The schedule could change depending on disputes involving classified information and the pending motion to dismiss.
Prosecutors Allege 13 Trades Generated $409,881
According to federal prosecutors, Van Dyke was involved in planning and carrying out Operation Absolute Resolve, the U.S. military operation that resulted in the capture of former Venezuelan President Nicolás Maduro on Jan. 3.
The indictment alleges that Van Dyke placed approximately $33,934 across 13 Polymarket trades between Dec. 27 and Jan. 2.
The contracts reportedly covered predictions involving Maduro’s removal, possible U.S. military activity in Venezuela, a potential invasion and presidential war powers.
Prosecutors claim several of those contracts ultimately settled in Van Dyke’s favor, producing approximately $409,881 in gains.
The government further alleges that he moved some of the proceeds through an overseas cryptocurrency wallet and attempted to conceal accounts associated with the trading activity.
These allegations have not been proven in court. Van Dyke faces multiple charges, including commodities fraud, wire fraud, alleged misuse of government information and transactions involving allegedly illicit proceeds.
Separate CFTC Civil Case Remains on Hold
The dispute is also playing out in a separate civil proceeding.
The CFTC filed its lawsuit against Van Dyke on April 23, marking what the agency described as its first insider-trading case involving prediction-market event contracts.
The regulator is seeking remedies that include financial penalties, restitution, disgorgement, trading restrictions and injunctive relief. Its complaint also invokes the so-called “Eddie Murphy Rule,” a provision addressing certain uses of improperly obtained government information in swap transactions.
However, the civil case has been stayed while the criminal prosecution continues.
Van Dyke’s defense argues that the CFTC should make its legal case within that civil proceeding rather than intervene in the criminal prosecution.
A Bigger Test for U.S. Prediction Markets
The dispute could become significant for the rapidly expanding prediction-market industry.
The central question is whether certain event contracts should be regulated primarily as financial derivatives under federal commodities law or treated differently because they function as predictions on political, geopolitical or real-world events.
The CFTC is simultaneously working on changes to its broader framework for prediction markets, while courts continue to consider the boundaries between federally regulated event contracts and state gambling laws.
The Van Dyke case therefore extends beyond the alleged $400,000 trading profit. Its eventual rulings could help define how U.S. commodities law applies to prediction markets and how far regulators can go in treating event-based contracts as financial derivatives.
