From Cointelegraph · By Felix Ng
US Defense Secretary Pete Hegseth has barred all Pentagon staff from using undisclosed information to place wagers on upcoming military action, including on prediction market platforms like Kalshi and Polymarket.
In a memo sent to senior Pentagon and defense agencies on Tuesday, Hegseth said all Department of War personnel are prohibited from engaging in financial transactions using nonpublic information. This involves both classified and unclassified information.
“Make no mistake why this matters. Our enemies watch movements in these markets,” Hegseth wrote. “The lives of our Service members often depend on the enemy not knowing what is coming.”
“Beyond operational security, financial stakes can warp judgment. A logistician with money riding on a strike date has an interest in that date. An analyst with a position on an outcome has an interest in that outcome,” he said.
The directive follows the April indictment of US Army soldier Gannon Ken Van Dyke, who allegedly used classified information about the operation to capture Venezuelan leader Nicolás Maduro to make more than $400,000 on Polymarket.
Prosecutors allege Van Dyke participated in planning and executing the operation, then used his advance knowledge to wager on outcomes related to Maduro’s removal. He has pleaded not guilty to all charges.
In February, Israeli authorities arrested and indicted a military reservist and a civilian for allegedly using classified information to place bets on Polymarket related to Israeli military strikes on Iran.
Related: CFTC, US soldier accused of illegal Polymarket bet spar over interpretation of prediction markets