Pentagon bans personnel from using insider information to trade on prediction markets

US Department of War personnel are barred from making financial transactions based on nonpublic information, including wagers on military outcomes through platforms such as Polymarket and Kalshi, under a memorandum issued by Secretary of War Pete Hegseth this week.

The prohibition, first reported by CBS News, applies whether the information is classified or unclassified and whether transactions are conducted personally or indirectly through another party. Personnel who violate the policy could face administrative, disciplinary or criminal consequences under military justice rules and applicable federal law.

The department said such transactions pose a national security risk because trading activity could reveal information about upcoming military operations. Foreign intelligence services could aggregate and correlate market signals to infer the timing of operations, potential targets and troop movements, potentially putting service members’ lives at risk.

The memorandum also warned that financial interests tied to military outcomes could distort personnel’s professional judgment and conflict with the department’s stated priorities of discipline, operational readiness and winning military engagements.

The Pentagon’s directive comes amid growing scrutiny of prediction market trading involving sensitive government information, including a federal case against Gannon Ken Van Dyke, a US Army soldier accused of profiting from classified intelligence.

In April 2026, prosecutors charged Van Dyke with allegedly exploiting information he obtained while participating in the planning and execution of Operation Absolute Resolve, the US military operation to capture Venezuelan President Nicolás Maduro.

According to prosecutors, Van Dyke used information gained through his involvement in the operation to place approximately 13 bets worth $33,034 on Polymarket. The wagers covered potential US military activity in Venezuela and Maduro’s removal from power, generating an alleged profit of approximately $409,881 after January’s capture.

Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.