US Defense Secretary warns military personnel against insider trading on prediction markets

Warning follows high-profile charges

Defense Secretary Pete Hegseth issued a letter dated Oct. 20, 2026, warning military members and department personnel that using nonpublic information on prediction markets is illegal and poses national security risks. The secretary reminded the Pentagon and all department personnel that they are prohibited from engaging in financial transactions using nonpublic information.

The ban applies to all financial exchanges, including prediction markets and sports betting platforms, according to the letter.

Hegseth stated that foreign adversaries are tracking prediction markets for insider trading patterns that might reveal upcoming US military operations.

Special Forces soldier charged in April

The warning follows charges brought by the Justice Department in April against US Army Special Forces Master Sgt. Gannon Ken Van Dyke, who faces allegations of using classified military secrets to profit $409,000.

The federal indictment alleged that Van Dyke made several perfectly timed trades totaling $33,000 on when Venezuelan leader Nicolás Maduro would be out as president. The federal government alleges that Van Dyke participated in the planning and execution of the US military operation to capture Maduro and used his access to classified information to profit by trading on the Polymarket prediction market.

Watchdog flags suspicious accounts

In August, the Anti-Corruption Data Collective flagged 152 prediction market accounts for trading on event contracts tied to US military operations suspected to be using nonpublic information. The accounts in question recorded a win rate of 97.2%, profiting $8 million on $2 million in trades.