Pentagon bans personnel from using nonpublic information to bet on prediction markets

Defense Secretary Hegseth warns enemy forces monitor market movements; directive follows soldier’s indictment for betting on Maduro operation

By LineZotpaper

Published23 October 2026

Read Time2 min

Defense Secretary Pete Hegseth has barred all Pentagon employees from wagering on prediction markets like Polymarket or Kalshi using classified or nonpublic information, citing operational security and conflict-of-interest risks. The ban comes months after a U.S. Army soldier was charged with exploiting advance knowledge of a mission to capture Venezuela’s president for financial gain.

In a memo to senior Pentagon and defense agency officials on Tuesday, Hegseth prohibited all Department of War personnel from engaging in financial transactions that involve undisclosed information, both classified and unclassified, related to upcoming military operations.

“Make no mistake why this matters. Our enemies watch movements in these markets,” Hegseth wrote. “The lives of our Service members often depend on the enemy not knowing what is coming.”

He also warned that financial stakes could skew judgment: “A logistician with money riding on a strike date has an interest in that date. An analyst with a position on an outcome has an interest in that outcome.”

The policy follows the April indictment of U.S. Army soldier Gannon Ken Van Dyke, who allegedly used classified information about the operation to capture Venezuelan leader Nicolás Maduro to make more than $400,000 on Polymarket. Prosecutors say Van Dyke participated in planning and executing the operation and then placed wagers on outcomes related to Maduro’s removal. He has pleaded not guilty.

A similar case emerged in February, when Israeli authorities arrested a military reservist and a civilian for allegedly using classified information to bet on Polymarket concerning Israeli military strikes on Iran.

Analysis

Why This Matters

The Pentagon order targets a new channel through which sensitive operational details could leak to adversaries who monitor prediction markets for signs of imminent action.
It aims to prevent financial conflicts of interest that might compromise decision-making by defense personnel.
The directive underscores the national security risks posed by decentralized, pseudonymous betting platforms that are difficult to regulate.

Background

Prediction markets like Polymarket and Kalshi allow users to place financial bets on the outcome of future events, including political contests and military operations. The $400,000 made by soldier Van Dyke illustrates the potential financial incentive for personnel with privileged information. The Hegseth memo formalizes what could previously have fallen under general prohibitions against insider trading or unauthorized disclosures.

Key Perspectives

Pentagon: The ban is a necessary operational security measure. Hegseth’s memo stresses that markets are monitored by adversaries and that financial interests can corrupt objective judgment. Prosecutors: The Justice Department’s indictment of Van Dyke and the Israeli arrests demonstrate that authorities view such betting as a serious breach of national security and are willing to pursue criminal charges. Critics/Skeptics: The source material does not contain any opposition to the directive, but questions may arise about enforcement, since prediction markets often operate pseudonymously across jurisdictions.

What to Watch

Whether additional Pentagon personnel are investigated or charged for past betting activities on prediction platforms.
How platforms like Polymarket and Kalshi adjust their terms of service or cooperation with law enforcement.
Any congressional or regulatory action that tries to bring prediction market trading under existing insider-trading laws.

Sources

Pentagon bans US forces from using military info to bet in prediction markets · Cointelegraph.com News

Checked

12 claims in this story checked against 1 source: 9 supported.

Show each claim

Partly supportedThe Pentagon bans personnel from using nonpublic information to bet on prediction markets.Cointelegraph.com News: “US Defense Secretary Pete Hegseth has barred all Pentagon staff from using undisclosed information to place wagers on upcoming military action, including on prediction market platforms like Kalshi and Polymarket.”
SupportedHegseth warned that enemy forces monitor market movements.Cointelegraph.com News: ““Make no mistake why this matters. Our enemies watch movements in these markets,” Hegseth wrote.”
SupportedThe directive followed the April indictment of a soldier accused of using advance knowledge of the Maduro operation for financial gain.Cointelegraph.com News: “The directive follows the April indictment of US Army soldier Gannon Ken Van Dyke, who allegedly used classified information about the operation to capture Venezuelan leader Nicolás Maduro to make more than $400,000 on Polymarket.”
Partly supportedHegseth’s policy covers all Pentagon employees and classified and unclassified information related to upcoming military operations, citing operational-security and conflict-of-interest risks.Cointelegraph.com News: “In a memo sent to senior Pentagon and defense agencies on Tuesday, Hegseth said all Department of War personnel are prohibited from engaging in financial transactions using nonpublic information. This involves both classified and unclassified information.”
SupportedHegseth wrote, “The lives of our Service members often depend on the enemy not knowing what is coming.”Cointelegraph.com News: ““The lives of our Service members often depend on the enemy not knowing what is coming.””
SupportedHegseth said, “A logistician with money riding on a strike date has an interest in that date. An analyst with a position on an outcome has an interest in that outcome.”Cointelegraph.com News: “A logistician with money riding on a strike date has an interest in that date. An analyst with a position on an outcome has an interest in that outcome,”
Not in the sourcesThe operation was to capture Venezuela’s president.Cointelegraph.com News: “the operation to capture Venezuelan leader Nicolás Maduro”
SupportedVan Dyke allegedly made more than $400,000 on Polymarket using classified information about the operation.Cointelegraph.com News: “who allegedly used classified information about the operation to capture Venezuelan leader Nicolás Maduro to make more than $400,000 on Polymarket.”
SupportedProsecutors said Van Dyke participated in planning and executing the operation and then wagered on outcomes related to Maduro’s removal.Cointelegraph.com News: “Prosecutors allege Van Dyke participated in planning and executing the operation, then used his advance knowledge to wager on outcomes related to Maduro’s removal.”
SupportedVan Dyke has pleaded not guilty.Cointelegraph.com News: “He has pleaded not guilty to all charges.”
SupportedHegseth issued the memo to senior Pentagon and defense agency officials on Tuesday.Cointelegraph.com News: “In a memo sent to senior Pentagon and defense agencies on Tuesday, Hegseth said”
SupportedIn February, Israeli authorities arrested a military reservist and a civilian over alleged betting on Polymarket using classified information about strikes on Iran.Cointelegraph.com News: “In February, Israeli authorities arrested and indicted a military reservist and a civilian for allegedly using classified information to place bets on Polymarket related to Israeli military strikes on Iran.”