Judge Orders Stay in Prediction Market Insider Trading Court Case
David Genge Published 25/08/2026
A judge has ordered a stay in the prediction market insider trading case against a US soldier. The civil case was filed by the Commodity Futures Trading Commission (CFTC). They are the federal regulators of prediction market sites. The defendant in the case is US soldier Gannon Ken Van Dyke. He allegedly earned more than $400,000 using nonpublic information to trade event contracts on Polymarket.
The alleged insider trading involved the US invasion of Venezuela to capture Venezuelan leader Nicolas Maduro. Van Dyke took part in the operation and made trades on info he would've known in advance. A separate criminal case against Van Dyke is still ongoing.
Van Dyke's lawyers are accusing the CFTC of predatory pursuits
In a filing on Monday in the US District Court for the Southern District of New York, Van Dyke’s lawyers took opposition to the CFTC’s efforts to file an amicus brief relating to claims in Van Dyke's case. This letter referenced the commodities regulator’s counsel. They filed a notice requesting permission from the court to provide its views on many of Van Dyke’s defense claims.
The CFTC seems mainly concerned with how Van Dyke's lawyers are portraying prediction markets. The regulator is unhappy that the filing is including a statement that event contracts on platforms like Polymarket were not “swaps” under the purview of the CFTC.
If the court were to agree with this interpretation of event contracts, it could set a legal precedent that would work against the CFTC and prediction market sites in many of their ongoing legal battles with state gambling regulators and attorneys general.
Van Dyke's lawyers were quick to pounce on this anomaly.
“The CFTC is no sheep ‘friend of the Court’ here,” defense attorneys said. “It is a regulatory wolf, with its own case against Mr. Van Dyke that it refuses to pursue itself. Rather, like a true coursing predator, the CTFC seeks to advance its own interests through the back door of an amicus brief instead of facing its own case against Mr. Van Dyke head-on.
"This Court should not countenance the CFTC’s litigation gambits.”
A Federal Judge agrees, ordering a stay in insider trading civil case
District Judge Andrew Carter was in agreement with Van Dyke's legal team. He granted a motion filed by prosecutors in July to stay the CFTC’s civil case.
The stay will remain in place “pending the outcome of the criminal proceeding.” The civil case filing took place in April.
Van Dyke is seeking a dismissal of the insider trading charges
Filing of the criminal charges against Van Dyke was also in April. According to the US Department of Justice, Van Dyke was a participant in the January operation to oust Maduro as head of Venezuela's government.
He is facing allegations that he earned $400,000 playing event contracts on prediction market site Polymarket relating to specifics of Maduro's removal from power. He's facing charges of using nonpublic information to earn a profit on prediction markets.
Earlier this month, Van Dyke's lawyers sought the dismissal of all charges against Van Dyke. Filing a 51-page motion, their main argument involves a suggestion that the Commodities Exchange Act is vague on whether event contracts are swaps
“If Congress, executive branch agencies, and courts all find the ‘swap’ definition ambiguous, how can ordinary citizens have fair notice that prediction market wagers are covered by the CEA?” the filing argues, according to reporting by Coin Telegraph. “They cannot.”
The judge has not ruled on the application for dismissal. Expectations are that the criminal trial against Van Dyke will begin later this year or early in 2027.