United States Secretary of Defense Pete Hegseth has issued an official memo to Pentagon leadership and defense agencies. The directive bars all military personnel and civilian employees from engaging in any financial transactions that leverage non-public official information.
The ban directly targets placing bets on prediction market platforms such as Polymarket and Kalshi, specifically regarding upcoming US military actions or operations. Its scope applies broadly, covering everything from classified state secrets to unclassified internal operational details that have not been publicly disclosed.
Beyond regulating financial transactions, however, the Pentagon sees far more critical risks facing troops in the field.
Why Prediction Markets Threaten Military Operations
Hegseth stressed that prediction market movements are actively monitored by adversaries. When personnel place wagers armed with insider knowledge from headquarters, sudden spikes in trading volume or odds on specific contracts can expose US military plans to enemies before operations are executed.
Such leaks are seen as directly endangering the safety of service members deployed in the field. In addition to compromising plans, the Defense Secretary warned that holding financial stakes could undermine the objectivity of troops, intelligence analysts, and logistics personnel while carrying out official duties.
US Army Soldier Charged with Pocketing $400,000 in Maduro Case
Hegseth’s strict instructions stem from an ongoing legal case in US courts. Last April, authorities charged US Army soldier Gannon Ken Van Dyke, accusing him of using operational plans regarding the arrest of Venezuelan leader Nicolás Maduro to place bets on Polymarket.
By leveraging confidential operational details, Van Dyke allegedly pocketed over $400,000 in profits. The high-profile political case serves as concrete proof of how non-public military intelligence can be exploited in prediction markets.
Similar Precedents Beyond the United States
The misuse of operational intelligence for prediction market wagering is not confined to the US defense establishment. Similar cases have surfaced abroad when foreign authorities caught personnel trading on digital betting platforms.
In February, Israeli authorities arrested a military reservist and a civilian who wagered on Polymarket. Both had taken market positions based on intelligence concerning planned military strikes against Iran.
For market participants and personnel with security clearance alike, the Pentagon memo draws a firm line. Betting on the basis of classified operational data is no longer merely a workplace disciplinary violation, but a crime leading directly to prosecution and arrest.
Sourced from Cointelegraph.
Also read: OCC Enacts GENIUS Act Regulation - Full Reserve Mandate and Total Interest Ban
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
