Pentagon Prohibits Personnel from Insider Trading on Prediction Markets
The Defense Department has banned military and civilian personnel from using nonpublic information for trades on prediction markets like Polymarket and Kalshi.
The Defense Department has banned military and civilian personnel from using nonpublic information for trades on prediction markets like Polymarket and Kalshi. This is an original Token Times brief synthesising 2 outlets (Blockonomi, Bitcoin.com), plus live market data, as of Fri, 23 Oct 2026 17:00:01 UTC.
This directive aims to prevent the exploitation of sensitive military information for financial gain while safeguarding national security and operational integrity.
- Pentagon bans personnel from trading on Polymarket and Kalshi using nonpublic info.
- Ban includes both classified and unclassified information, even through third parties.
- Defense Secretary warns of risks to military operations and intelligence exposure.
- Polymarket's TVL rose 8.4% in the past week to $376.65M.
Blockonomi and Bitcoin.com both report that the Pentagon has officially prohibited military personnel and civilian employees from using nonpublic information to trade on prediction markets like Polymarket and Kalshi. The directive, issued by Defense Secretary Pete Hegseth, covers both classified and unclassified information and extends to trades made indirectly through third parties. While both outlets highlight the risks of exposing sensitive military operations to foreign intelligence, Bitcoin.com specifically mentions the prosecution of a Special Forces soldier as a potential catalyst for the ban, a detail not mentioned by Blockonomi.
The U.S. Department of Defense has issued a directive prohibiting military personnel and Pentagon employees from using nonpublic information to trade on prediction markets such as Polymarket and Kalshi. The ban is designed to prevent the exploitation of sensitive military information for financial gain and to protect national security.
The directive, announced by Defense Secretary Pete Hegseth, explicitly forbids the use of both classified and unclassified information for trades, including those made indirectly through third parties. Hegseth warned that bets on military operations could expose sensitive intelligence to American adversaries and potentially endanger the lives of troops.
This move follows recent scrutiny of insider trading practices on decentralized prediction markets, with concerns that such activities could compromise military operations. The ban is part of a broader effort to regulate the use of nonpublic information in financial markets.
The directive comes amid growing concerns about the intersection of financial markets and national security. The Pentagon's decision reflects a recognition of the potential risks associated with the use of prediction markets by individuals with access to sensitive information.
In the broader market context, the total crypto market cap stands at $2.8 trillion, with the overall market remaining relatively flat. 
Bitcoin is down 0.03% in the past 24 hours, and the Fear & Greed Index is at 50, indicating a neutral sentiment. Polymarket's Total Value Locked (TVL) has increased by 8.4% over the past week to $376.65 million, according to DeFiLlama.
Figures and sectors in this story, checked live against on-chain aggregators · October 23, 2026.
Token Times reads these figures directly from on-chain aggregators (DeFiLlama, mempool.space) at build time — independent of what any outlet reported. Sector totals aggregate every protocol DeFiLlama tracks in that category. Values are live and will change.
Pentagon Prohibits Personnel from Insider Trading on Predict — questions & answers
What is the Pentagon's new policy on prediction market trading?
The Pentagon has banned military and civilian personnel from using nonpublic information to trade on prediction markets like Polymarket and Kalshi.
Why did the Pentagon issue this ban?
The ban aims to prevent the exploitation of sensitive military information for financial gain and to protect national security.
What are the potential consequences of violating the ban?
Violations may result in administrative, disciplinary, or criminal actions, as warned by Defense Secretary Pete Hegseth.
Which outlets reported this story?
This is an original Token Times brief that synthesises reporting from Blockonomi, Bitcoin.com, with the key figures cross-checked for agreement across them. It is not a copy of any one article — follow the source links above for the original reporting.
Original summary — not financial advice. This is an original Token Times brief that summarises a development reported elsewhere and adds live market data for context; it is not the original article and reproduces no part of it. Follow the source link above for full details. Crypto is volatile and high-risk — always do your own research.