Defense Department Prohibits Military Personnel from Wagering Using Classified Intelligence
Defense Secretary Pete Hegseth has issued a directive preventing all Defense Department staff from placing wagers using confidential military intelligence, in response to a Polymarket insider trading scandal involving $400,000.
Defense Secretary Pete Hegseth of the United States has issued an order prohibiting all staff members at the Pentagon from utilizing confidential intelligence to make financial wagers on future military operations, including through prediction market services such as Kalshi and Polymarket.
Through an official memorandum distributed to top Pentagon officials and defense agency leadership on Tuesday, Hegseth declared that all Department of War employees are forbidden from participating in financial dealings that leverage nonpublic intelligence. The prohibition encompasses information that is both classified and unclassified in nature.
Make no mistake why this matters. Our enemies watch movements in these markets. The lives of our Service members often depend on the enemy not knowing what is coming.
Beyond operational security, financial stakes can warp 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.
This new directive comes on the heels of the April criminal indictment against US Army soldier Gannon Ken Van Dyke, who is accused of leveraging classified intelligence regarding the military operation designed to capture Venezuelan leader Nicolás Maduro to generate profits exceeding $400,000 through Polymarket transactions.
Federal prosecutors claim that Van Dyke was directly involved in both the planning phases and the execution stages of the operation, subsequently exploiting his insider knowledge to place strategic bets on various outcomes connected to Maduro's potential removal from power. He has entered a plea of not guilty to the entirety of the charges brought against him.
Earlier in February, law enforcement authorities in Israel took into custody and formally charged a military reservist along with a civilian on allegations of exploiting classified intelligence to make financial wagers on Polymarket concerning Israeli military operations targeting locations in Iran.