Hegseth Memo Warns Troops Prediction Bets Expose Movements
Pentagon officials are barred from trading on inside information after concerns grew that wagers could reveal troop movements to adversaries.
By Layla Edwards ·
Defense Secretary Pete Hegseth has issued a firm warning to military personnel regarding their participation in prediction markets. He argues that these bets can endanger service members by signaling sensitive operational data to foreign adversaries. His concern centers on the potential for financial transactions to compromise military judgment and operational security.
A memo sent by Hegseth to senior Pentagon leadership and combatant commanders explicitly prohibits using nonpublic information for financial gain. The document stresses that even unclassified details cannot be used to inform trades on platforms such as Polymarket or Kalshi. The directive aims to prevent the exposure of sensitive information through financial markets.
Hegseth stated that enemies watch market movements closely. He noted that transactions create signals that foreign intelligence services can exploit to anticipate troop movements and targets. The memo emphasizes that the safety of service members depends on keeping operational plans secret from adversaries.
The concern follows a recent case involving a US Army soldier. In April, the soldier was arrested for using confidential information to make $410,000 in Polymarket bets regarding the capture of Venezuelan President Nicolás Maduro. This incident highlighted the potential for insider advantages in military-related markets.
An August report by the Anti-Corruption Data Collective found similar patterns elsewhere. The group identified 152 suspicious wallets that placed bets on defense markets and won a combined $8 million. This data suggested widespread activity in this sector.
The prohibition applies to all financial platforms and covers all Department of Defense personnel. Hegseth's directive forbids any transaction informed by nonpublic information, regardless of classification status. Officials must avoid trading on knowledge not available to the general public.
The memo was distributed to senior Pentagon leadership, Combatant Command leaders, and Defense Department field activity directors. It outlines specific restrictions on using insider information for financial purposes. The guidance aims to protect operational security.
The policy prohibits using nonpublic information to trade on any platform. It covers both classified and unclassified data. This rule applies to all Department of Defense personnel. The goal is to prevent the exposure of sensitive information.
Source: Ars Technica · original report published
