US Soldier Seeks Dismissal of CFTC Polymarket Case, Says Maduro Contracts Were Not ‘Swaps’

The U.S. Army Special Forces soldier accused of using confidential information to profit on Polymarket is arguing the CFTC’s civil enforcement case against him should be dismissed because event contracts do not qualify as “swaps” under the Commodities Exchange Act (CEA) and the agency exceeded its authority in bringing the case.

The CFTC sued Van Dyke in April, alleging he used confidential military information tied to the capture of Venezuelan President Nicolás Maduro and used it to purchase Polymarket event contracts tied to whether Maduro would leave office.

Prosecutors allege that Van Dyke profited more than $400,000 from roughly $33,000 in wagers. The civil case parallels a criminal prosecution.

In a pre-motion conference letter, Gannon Ken Van Dyke’s defense called the CFTC’s case “unprecedented” and raised “multiple issues of first impression.”

Defense Says Maduro Contracts Were Not Swaps

Van Dyke’s principal argument is that the CFTC cannot pursue its claims because the Polymarket contracts do not meet the statutory definition of swaps.

In its complaint, the agency argues the contracts qualify as swaps because they fall under its definition of “any agreement, contract, or transaction … that provides for any purchase, sale, payment, or delivery (other than a dividend on an equity security) that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence.”

However, the defense argues the contracts were merely geopolitical wagers on whether Maduro would be removed from power during a specified period.

The filing states:

Such geopolitical bets are not ‘swaps’ subject to the Commodities Exchange Act, and transactions concerning such event contracts cannot serve as a basis for liability.”

According to the defense, each of the CFTC’s three claims depends on the contracts qualifying as swaps. The defense argues the case cannot proceed if the court rejects that interpretation.

The defense further argues that, even if the court finds the statute ambiguous, “fair notice and due process concerns, as well as the rule of lenity, counsel a narrow reading in Van Dyke’s favor.” It adds that “no similar case has ever been brought.” That creates a “serious statutory and constitutional fair notice concerns regarding this action.”

Filing Challenges CFTC’s Rulemaking Authority

The defense also argues that the CFTC cannot rely on Regulation 180.1 because the agency exceeded the authority Congress granted it when adopting the rule.

The CFTC alleges Van Dyke violated Regulation 180.1 by using confidential information in connection with swaps to commit fraud or deceit. Van Dyke’s attorneys contend the regulation exceeds the authority Congress granted the agency under the CEA. Therefore, they say, it cannot serve as the basis for liability in this case.

In the letter, the defense requested an expedited pre-motion conference. It argues that the allegations have already caused “serious negative effects” on Van Dyke’s reputation, career and family and asks the court to move the case forward as quickly as possible.

Case Tests CFTC’s Prediction Market Authority

The case could test one of the CFTC’s core legal theories in its broader prediction market litigation against state officials: that certain event contracts qualify as “swaps” under the CEA and the CFTC has exclusive jurisdiction over them.

Courts have reached mixed conclusions on that question.

The Third Circuit held that Kalshi’s sports-event contracts are likely swaps in its dispute with New Jersey. Federal judges in Arizona and Tennessee reached similar conclusions in separate challenges brought by Kalshi against state regulators.

Other courts have reached or suggested the opposite conclusion.

In Ohio, a federal judge found Kalshi’s sports-event contracts are likely not swaps. The ruling created a split with the Tennessee ruling within the Sixth Circuit. In Nevada, both a federal judge and a state court have likewise concluded the contracts are unlikely to qualify as swaps. A federal judge in Maryland also found in 2025 that the contracts are likely not swaps.

Unlike those cases, however, Van Dyke’s motion concerns geopolitical prediction contracts tied to Nicolás Maduro rather than sports-event contracts. That could potentially present a distinct question under the CEA.