- Prosecutors say Gannon Van Dyke used military secrets to make trades on Polymarket.
- Kalshi says he tried to open an account on its platform but was blocked.
- Van Dyke, a master sergeant at Fort Bragg, was indicted on multiple felonies.
The Army Special Forces soldier indicted on charges that he used military secrets to win over $400,000 in Polymarket trades was blocked from opening an account on rival prediction market platform, Kalshi.
Elisabeth Diana, head of communications for Kalshi, told Business Insider that Gannon Van Dyke did not make it past the verification and know-your-customer process but declined to provide more details. Reuters, citing an unnamed source, had earlier reported that Van Dyke tried but failed to gain access to Kalshi.
Van Dyke, a 38-year-old master sergeant assigned to Fort Bragg in North Carolina, was charged with wire fraud and other felonies for placing more than $33,000 in trades related to US action in Venezuela, prosecutors said.
The career soldier was involved in the planning and execution of Operation Absolute Resolve to capture Venezuelan President Nicolás Maduro and used classified information to make his bets, the indictment alleges.
Van Dyke is being prosecuted in New York, but made his first appearance in federal court in North Carolina on Friday. The court docket states that the government did not seek to detain him, and he was released on $250,000 bond.
He is represented by federal public defenders, who did not respond to a request for comment. He also did not respond to a call from Business Insider.
Polymarket did not immediately respond to an inquiry about the vetting Van Dyke underwent when he signed up for an account. The company said that it tipped off the feds to Van Dyke's trades.
In a statement on X, CEO Shayne Coplan said, "Noise aside, the reality is we work proactively with all relevant authorities on any suspicious activity on our marketplace. We flagged this, referred it, and cooperated throughout the process. This happens constantly behind the scenes, despite what many are led to believe."
Critics have raised alarms about the potential of insider trading on prediction markets and fretted about the possibility that the markets or the current events that fuel them could be manipulated for profit. Kalshi bans insider trading, and Polymarket bans trades based on confidential information.
Kalshi earlier this week said it suspended three political candidates for trading on their own elections as the platform moves to crack down on insider trading.
Asked about the Van Dyke case by reporters in the Oval Office on Thursday, President Donald Trump said he wasn't a big fan of prediction markets.
"The whole world, unfortunately, has become somewhat of a casino," Trump, who once owned several casinos, said. "I don't like it, conceptually, but it is what it is."
Michael Selig, chairman of the Commodity Futures Trading Commission, which regulates prediction markets, has defended the businesses, at one point calling them "valuable to society."
The commission filed a civil complaint against Van Dyke in federal court on Thursday.
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