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Gannon Ken Van Dyke, a U.S. Special Forces soldier, was arrested Thursday for allegedly placing a bet about the capture of former Venezuelan President Nicolás Maduro on the prediction market website Polymarket. Van Dyke, who participated in the operation, reportedly put down $33,034 betting on the precise details of how the capture would happen, and walked away with more than $409,000.
Van Dyke was charged with “unlawful use of confidential government information for personal gain, theft of nonpublic government information, commodities fraud, wire fraud, and making an unlawful monetary transaction.” Apparently, this kind of blatant corruption is still illegal, at least if you’re not a high-level government official, a member of the Trump family or one of their friends, or the president himself.
But for prediction market companies, this is just the system operating as designed. Though both Polymarket and Kalshi have recently attempted to crack down on insider trading after bad press stemming from a string of flagrant insider trades, prediction markets are supposed to be a “truth machine,” to quote Polymarket CEO Shayne Coplan, because they process as much information as possible into the market price of their various bets—and what information could be more relevant than insider information?
There’s just one problem: This is a stupid idea.
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