Federal authorities are preparing potential charges against a U.S. servicemember accused of making more than $1 million in profits from Polymarket bets tied to military operations, according to people familiar with the investigation.
The servicemember, who has been under scrutiny since the spring, allegedly made successful bets involving the timing or outcomes of U.S. military strikes in Iran and Venezuela. The case is part of a broader federal investigation into whether military personnel used confidential information to trade prediction-market contracts.
A separate investigation involves a KPMG employee accused of betting on whether a public company would beat quarterly earnings expectations, potentially using nonpublic information obtained through their employment.
Charges in both cases could come this fall, although prosecutors have not made final decisions. The investigations involve the Justice Department, federal prosecutors in Manhattan and Washington, and the CFTC.
The cases are part of a broader effort to determine how existing insider-trading and financial-fraud laws apply to prediction markets such as Polymarket. Previous prosecutions involving alleged insider trading on the platform are already facing challenges over whether those laws apply to prediction-market contracts.
Notably, the servicemember has not been charged at this point. The allegations remain under investigation.
