Crypto: The Pentagon bans its soldiers from betting on Polymarket and Kalshi

Military intelligence is not for betting. Pete Hegseth reminds all Pentagon personnel of the prohibition against using non-public information for financial transactions, notably on Polymarket and Kalshi. In a memorandum dated October 20, the U.S. Secretary of Defense highlights a double risk: revealing clues about upcoming operations and introducing personal financial interests into military decisions.

Key Points

• The ban concerns non-public information, whether classified or not.
• Military personnel and civilian staff of the department are affected, particularly when using predictive markets.
• An American soldier is accused of having earned over $400,000 through bets related to the capture of Nicolás Maduro.
• Violations can lead to administrative, disciplinary, or criminal sanctions.

Polymarket and Kalshi: The Pentagon wants to protect its operations

Pete Hegseth's memo targets the use of information obtained in a professional capacity to gain a financial advantage. It does not constitute a general ban on accessing Polymarket or Kalshi**.** The distinction lies in the intelligence used to take positions, including when it is not classified.

The stakes go beyond the issue of personal profit. In a predictive market, participants buy contracts associated with an event. Prices and volumes can thus reveal that a bettor anticipates an outcome with unusual confidence:

<< Our enemies monitor movements in these markets. >> Pete Hegseth, U.S. Secretary of Defense -- Source: memo

According to the official, adversarial intelligence services can exploit these signals to anticipate movements, targets, or the timing of an operation. A bet does not need to directly disclose a confidential document to present a risk.

Pete Hegseth also emphasizes conflicts of interest. A logistician betting on a strike date has a financial interest in that timeline. Similarly, an analyst exposed to an outcome could see their judgment influenced by their position.

The directive is based on existing obligations. Depending on the facts, their violation may fall under administrative measures, the Military Justice Code, or federal criminal law. It does not, by itself, create a new offense. The Pentagon bans military personnel from predictive market platforms -- Source: X Account

The Van Dyke case illustrates the risks of military betting

The reminder comes after charges were brought in April against Gannon Ken Van Dyke, an American soldier accused of exploiting confidential information regarding the operation to capture Nicolás Maduro.

According to prosecutors, he allegedly participated in its preparation and execution, then used this prior knowledge to bet on Polymarket. The alleged gains exceed $400,000. The soldier has pleaded not guilty: the charges remain contested.

A comparable precedent exists in Israel. In February, authorities announced the arrest and indictment of a reservist and a civilian suspected of having used classified information to bet on Israeli strikes against Iran.

These cases demonstrate the difficulty of distinguishing an anticipation based on public sources from a bet fueled by confidential intelligence. A profitable position is not enough to establish an offense: investigators must determine what information was accessible to the bettor and how they used it.

For the Pentagon, the problem begins before a potential trial. As soon as personnel turn operational information into a financial position, they can create a visible signal and a personal interest incompatible with their mission.

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