Federal Court Halts CFTC Civil Proceedings Against Military Service Member in Prediction Market Case
Criminal proceedings will take precedence over civil litigation in the case of a US military service member accused of leveraging privileged information to generate profits through prediction market platforms.
A federal district judge has issued an order halting civil litigation brought by the US Commodity Futures Trading Commission (CFTC) until the resolution of criminal charges against a member of the US military who allegedly exploited privileged information to generate profits from a Polymarket event contract related to the potential removal of Venezuelan President Nicolás Maduro from power.
District Judge Andrew Carter, presiding over the US District Court for the Southern District of New York, issued his decision on Monday, approving a request submitted by federal prosecutors in July to pause the CFTC's civil litigation "pending the outcome of the criminal proceeding."
The legal actions targeting Gannon Ken Van Dyke, who serves as a Master Sergeant in the US Army Special Forces, center on accusations of generating profits exceeding $400,000 through Polymarket event contracts related to Maduro's potential removal from office. Federal prosecutors from the US Justice Department assert that Van Dyke participated in the operation aimed at removing Maduro in January, which has led to accusations that he exploited nonpublic information to generate profits through prediction market platforms.
Both the criminal charges and civil lawsuit, each initiated in April, may carry far-reaching consequences for elected officials and government personnel who engage in prediction market activities. The military service member has already submitted a motion seeking dismissal of the criminal charges based on various legal arguments, including assertions that the CFTC's classification and enforcement of event contracts as "swaps" on prediction market platforms was characterized by "ambiguity."
Van Dyke entered a plea of not guilty to the full range of charges and faces the prospect of a criminal trial commencing in late 2026 or early 2027.