A U.S. soldier, charged this Thursday with utilizing classified military intelligence to wager on the ousting of Venezuelan President Nicolás Maduro, was unable to establish an account on Kalshi due to the platform’s know-your-customer (KYC) protocols, as reported by Decrypth. Gannon Ken Van Dyke is accused of placing 13 bets on Venezuela-related outcomes that netted over $400,000 in profits through Polymarket. The 38-year-old soldier failed to verify his identity with Kalshi, according to a source familiar with the incident.
In its complaint, the CFTC alleges that Van Dyke attempted to create an account on a prediction market not linked to Polymarket, which also hosted bets regarding Maduro’s removal. It is claimed he contacted the platform’s customer support but was subsequently rejected. Following a 2022 settlement with the CFTC, Polymarket’s international platform explicitly bars U.S. individuals from participation by implementing IP blocking for compliance enforcement. The DOJ contends in its complaint that Van Dyke, stationed at a military base in North Carolina, used a VPN to access Polymarket while masquerading as an overseas user.
As legal proceedings advance with the DOJ and CFTC, Polymarket’s challenges in preventing U.S. persons from accessing its international platform may become evident, according to Michael Weinstein, a white-collar criminal defense lawyer at Cole Schotz. “The differences between one company’s KYC protocols versus another’s could be pivotal for the government in prosecuting this case,” he informed Decrypt. “Authorities are likely to subpoena his failed attempts with the other platform as well.”
On its U.S. platform, Americans must undergo KYC procedures, while bettors on the international version can create accounts using just an email address or a crypto wallet. On Thursday, Polymarket announced it identified Van Dyke’s actions and reported them to authorities, cooperating fully in the process.
“Today’s arrest demonstrates that our systems function effectively,” stated the platform, highlighting new market integrity rules against insider trading introduced last month. However, the case raises additional concerns regarding Polymarket’s operations, according to Amanda Fischer, policy director and COO at Better Markets, who previously served as chief of staff to SEC Chair Gary Gensler.
“It is intriguing that neither the CFTC nor DOJ charged Polymarket for failing to block U.S. bettors from accessing its platform,” she remarked to Decrypt. “This situation should prompt questions about Polymarket’s recent launch of a domestic platform in the United States.” In a statement, CFTC Chair Mike Selig emphasized zero tolerance for fraud and insider trading. Earlier this month, he told Politico that his regulatory focus is not on offshore prediction market activities.
“Regulating by enforcement or pursuing off-shore investigations are not priorities,” he stated. “My primary objective as a regulator is to establish rules that safeguard American interests.” Decrypth reached out to Polymarket for comment, while Kalshi opted not to respond.