Gannon Ken Van Dyke: Seeks Polymarket 'Swaps' Dismissal

• Army Master Sergeant Gannon Ken Van Dyke is seeking to dismiss a five-count federal indictment alleging insider trading on Polymarket using confidential military information.
• Prosecutors accuse Van Dyke of fraudulently earning $400,000 from bets related to the capture of Nicolas Maduro.
• Van Dyke's defense argues his Polymarket wagers are "event contracts," not "swaps" as defined by the Commodity Exchange Act, citing Dodd-Frank's intent for hedging and price discovery.
• The defense also contends that confidential military operation plans do not constitute "government property" under the wire fraud statute.
• U.S. District Judge Margaret Garnett has expressed skepticism regarding the defense's ability to dismiss charges related to the alleged misuse of confidential government information for personal gain.

Lawyers advising clients involved in prediction markets or those facing charges related to non-traditional financial instruments should closely monitor this case for clarity on the Commodity Exchange Act's 'swap' definition.

An active-duty U.S. Army Master Sergeant, Gannon Ken Van Dyke, is seeking to dismiss a federal indictment in what prosecutors describe as a first-of-its-kind insider trading case involving prediction markets. Van Dyke, a Special Forces soldier, stands accused of fraudulently accumulating $400,000 through wagers placed on Polymarket, a prediction market platform. These bets allegedly leveraged confidential information regarding a U.S. military operation aimed at capturing Venezuela's deposed president, Nicolas Maduro.

The charges against Van Dyke, filed in April, include five federal counts: unlawful use of government information for personal gain, theft of nonpublic government information, wire fraud, commodities fraud, and making an unlawful monetary transaction. If convicted, the Army soldier faces a potential sentence of decades in prison. He entered a plea of not guilty to these charges on April 28, 2026, at a Southern District of New York courthouse, where the current proceedings are unfolding.

Central to Van Dyke's motion to dismiss is the argument that his Polymarket wagers do not qualify as illegal "swaps" under the Commodity Exchange Act (CEA). His legal team contends that the transactions at issue are properly characterized as "event contracts" rather than financial instruments falling under the statutory definition of a 'swap.' According to Van Dyke's motion, the plain terms and structure of the Dodd-Frank Act, along with numerous court precedents, establish that the term 'swap' primarily covers financial instruments designed to hedge price risk and facilitate price discovery, a category into which his wagers do not fit.

Daniela Manzi, an attorney representing Van Dyke from Agnifilo Intrater, further elaborated on this point, asserting that federal prosecutors have adopted an overly broad, "limitless definition of what a swap is." She emphasized that the CEA is intended to regulate derivatives that facilitate hedging and price utility, which Congress found to serve public business interests. However, U.S. District Judge Margaret Garnett, a Joe Biden appointee, challenged this perspective, questioning the defense on whether there is a significant distinction between betting on weather phenomena, such as a Super El Niño year, and geopolitical events, and whether they must prove that no prediction market bet can be considered a swap under the CEA.

In response, Assistant U.S. Attorney Nicholas W. Chiuchiolo argued that the initial three counts of the indictment adequately allege misconduct related to a swap. Chiuchiolo highlighted that Congress granted the Commodity Futures Trading Commission (CFTC) broad authority over swaps, defined the term broadly, and established a Special Rule allowing discretionary, case-by-case intervention to bar swaps, including those related to war and gaming contracts, if deemed "contrary to the public interest." He maintained that for an event to be considered a "swap" by Congress, it merely needed to be "associated with a potential financial, economic, or commercial consequence."

Beyond the debate over the Commodity Exchange Act's 'swaps' definition, Van Dyke's defense also moved to dismiss two other counts by challenging the interpretation of "government property" under the wire fraud statute. Zach Intrater, a partner at Agnifilo Intrater, argued that confidential plans for a future military operation, such as those allegedly used by Van Dyke, do not constitute the government’s "property" in the context of the wire fraud statute.

Intrater cited precedent from the Second Circuit, stating that the court has "clearly stated that information of the kind charged in the indictment is not property." He further questioned the prosecution's premise by asking how the government was injured, specifically whether the confidential military plans held commercial value for the entity possessing them. This line of argument seeks to undermine the basis for the wire fraud charges by disputing the nature of the information allegedly misused.

During the proceedings, Judge Garnett indicated that the "core of criminality" alleged in the first three counts of Van Dyke’s indictment—which involve taking confidential government information from an operation he was involved in and using it for personal financial gain—presented a significant hurdle for the defense to overcome in their motion to dismiss. The judge remarked, "I don’t think there really is an argument that someone in Mr. Van Dyke’s position could not possibly have known that."

Lawyers advising clients involved in prediction markets or those facing charges related to non-traditional financial instruments should closely monitor this case for clarity on the Commodity Exchange Act's 'swap' definition. The court's ruling will also provide guidance on what constitutes 'government property' in wire fraud cases involving confidential government information. The outcome of this case is expected to have substantial implications for the legality of prediction markets and the prosecution of individuals accused of misusing sensitive government data.

Lawyers advising clients involved in prediction markets or those facing charges related to non-traditional financial instruments should closely monitor this case for clarity on the Commodity Exchange Act's 'swap' definition. The court's ruling will also provide guidance on what constitutes 'government property' in wire fraud cases involving confidential government information.

Source: Original reporting via Courthouse News Service