Polymarket soldier case heads to trial as judge rejects dismissal and CFTC probe returns

28 Oct 2026

28 Oct 2026, 06:08 UTC+01:00

Regulation TradeReviewed News Desk

The criminal case against a US special forces soldier accused of insider betting on Polymarket is moving to trial after a federal judge declined to throw it out, BeInCrypto reported on Wednesday, citing Courthouse News. The ruling lands as the Commodity Futures Trading Commission (CFTC) is reported to be reopening its review of the prediction market.

What the soldier is accused of

Prosecutors allege that Master Sgt. Gannon Ken Van Dyke used classified knowledge of the January operation that captured Venezuelan leader Nicolás Maduro to bet on the outcome on Polymarket. According to the charges, he spent about $33,000 on 13 bets before the raid, and the wagers produced $409,881 in profit.

He is also accused of opening his account through a virtual private network (VPN), which hides a user’s real location. Polymarket’s international platform is not meant to be used by US traders, and the company says its rules bar that kind of workaround. Van Dyke has pleaded not guilty.

Why the swaps question matters

The defense argues that the wagers were event contracts, not swaps, and therefore fall outside the derivatives the CFTC regulates. Judge Margaret Garnett rejected the motion to dismiss this week, finding that the swaps question could not be settled at this stage. The dispute now moves toward a trial tentatively scheduled for Dec. 7.

The outcome could reach well beyond one defendant. A win for prosecutors on the swaps theory would strengthen the CFTC’s footing over event contracts in general. A loss could narrow it, although a single case is unlikely to settle the wider legal question on its own.

CFTC reportedly reopens Polymarket review

Separately, two sources told Reuters that the CFTC is reviewing whether Polymarket honored a 2022 settlement in which it promised to block US users. The reported scope also covers Polymarket’s CFTC-licensed US exchange. Polymarket says it has revamped its controls and that it referred the soldier’s trades to the authorities itself.

The pressure is building on several fronts. CFTC enforcement director David Miller said in March that he would police prediction markets aggressively, a New York lawsuit accuses Polymarket’s US operator of running an illegal gambling business, and the House Oversight Committee is running an insider trading probe that names the platform. Last year, by contrast, the CFTC and the Justice Department closed earlier probes into Polymarket without charges.

What it means for traders

Prediction markets have grown quickly under friendlier US policy, and crypto traders increasingly use them alongside spot and futures positions. A court finding that event contracts are swaps would put them more firmly under CFTC rules, which could mean tighter access checks and more enforcement against insider trading. Traders who want regulated, KYC-based access to crypto derivatives should compare platforms carefully: our exchange comparison ranks BingX first and OKX second, and our testing method explains how we score fees, security and product range. Using a VPN to get around an exchange’s country restrictions breaks platform rules and can lead to frozen accounts. This is not investment advice.

Sources

• BeInCrypto: The Soldier, VPN and $400K Test To CFTC's Reach as Polymarket Probe Returns

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