Bloomberg Found $200 Million in Suspicious Wagers on Kalshi and Polymarket. An Army Sergeant Has Already Been Indicted.
A Bloomberg investigation identified approximately $200 million in wagers on Kalshi and Polymarket between January and June 2026 displaying characteristics associated with potential insider trading — concentrated in geopolitical event markets. A federal indictment unsealed in April charged US Army Master Sergeant Gannon Ken Van Dyke with using classified information about Operation Absolute Resolve, the operation that captured Venezuelan President Nicolás Maduro, to generate $409,000 in profit. 57% of wallets with unusually successful returns were created within 24 hours of placing bets. The House Oversight Committee has launched a formal investigation.
A Bloomberg investigation published July 20 identified approximately $200 million in wagers on Kalshi and Polymarket between January and June 2026 that displayed characteristics associated with potential insider trading, with geopolitical event markets — including those covering tensions with Iran and political developments in Venezuela — accounting for a significant portion of the suspicious activity. The most striking detail in the dataset: 57% of wallets with unusually successful returns were created within 24 hours before placing the bets that generated those returns. Fresh accounts, consistently profitable, on markets tied to events that subsequently occurred — a pattern that analysts say is difficult to explain without access to non-public information.
The investigation has already produced a federal criminal case. A grand jury indictment unsealed on April 24, 2026, charges US Army Master Sergeant Gannon Ken Van Dyke with using classified intelligence about Operation Absolute Resolve — the operation that led to the capture of Venezuelan President Nicolás Maduro — to place wagers that generated more than $409,000 in profit. Van Dyke had access to mission-critical intelligence ahead of the operation and is alleged to have converted that foreknowledge into prediction market positions before the news was public. The case is the first federal criminal prosecution of a prediction market participant for insider trading and establishes that the conduct can be prosecuted under existing law — even though prediction markets did not exist when the insider trading statutes were written.
Both platforms say they have implemented screening measures. Kalshi now collects employment data from users in certain markets to identify prohibited participants, bars politicians from wagering on their own campaigns, and bars athletes from betting on markets tied to their own sports. But Bloomberg found that new evasion techniques are emerging faster than the platforms can counter them — fresh wallets, proxy accounts, and structuring bets across multiple accounts to stay below detection thresholds. The House Oversight Committee, led by Chairman James Comer, launched a formal investigation into insider trading on prediction market platforms following the Bloomberg report. The investigation follows directly from the House Agriculture Committee hearing on July 22, where integrity monitoring was a central issue, and from the Group of Copenhagen's report on the same day flagging the Polymarket market on Folarin Balogun's availability — which was opened before FIFA publicly confirmed his suspension had been lifted.
The insider trading problem is structurally different from the state-versus-federal regulatory dispute over sports event contracts. A state attorney general suing over sports gambling enforcement is a known quantity: courts can apply existing law, platforms can geofence, and the CFTC can preempt or not. Insider trading on geopolitical prediction markets is harder to contain. The markets that attracted the most suspicious activity are precisely the ones that generate the clearest information signal — which candidate will win, which operation will succeed, which policy will change — because they involve participants who may have access to information that markets cannot price. Whether prediction markets can solve that problem with technology, or whether regulators need to impose new rules, is now an open question at both the Justice Department and on Capitol Hill.
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Recent updates
Utah Files Felony Charges Against Kalshi and Its Founders — Second State to Criminally Charge a Platform
Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanor, including a second-degree 'pattern of unlawful criminal activity' count and 12 counts of online gambling promotion. The charges stem from a September sting in which an undercover agent placed 12 sports wagers verified to be in Utah. The CFTC sued Utah the day before to block state enforcement, its tenth such suit. Utah is the second state after Arizona to criminally charge Kalshi, and the first to charge the founders personally. Kalshi called it a 'crazy overreach.'
NBA Names Kalshi and Polymarket Preferred Exchanges — Leaving the NFL Alone in Opposition
The NBA announced on October 26 that it has named Kalshi and Polymarket its 'preferred prediction market exchanges,' signed a non-binding memorandum of understanding with the CFTC on basketball integrity, and expanded its DraftKings deal to include prediction markets — the first league to extend a sportsbook partnership into the category. The exchange deals bar league and team personnel from trading NBA contracts, limit permissible markets, and require sharing of suspicious-trading data, in exchange for NBA intellectual property and official data. The NBA joins MLB, the NHL, and MLS as partnered leagues, leaving the NFL as the lone major holdout — and the only league fighting the platforms in court.
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinizing oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures attempting to trade 'oftentimes after the fact.' The remarks highlight the CFTC's dual and somewhat conflicting role as both the platforms' federal protector and their manipulation watchdog, at a time when the agency has shed enforcement staff.