MANHATTAN (CN) - A U.S. Army soldier pleaded not guilty Tuesday to charges that he unlawfully used access to classified intelligence on the capture of Venezuelan President Nicolas Maduro to win more than $400,000 on the prediction market Polymarket. 

Gannon Ken Van Dyke, a master sergeant in the Special Forces, was hit with a five-count federal indictment last week, in which he was charged with the unlawful use of government information for personal gain, theft of nonpublic government information, wire fraud, commodities fraud and making an unlawful monetary transaction.

He faces the prospect of decades in prison if convicted at trial. 

But he'll be free until then; the 38-year-old was released on a $250,000 bond Tuesday. Pursuant to the bond agreement, Van Dyke was forced to turn in his firearms and passport, will be barred from "excessive alcohol use" and will have travel restricted to certain locations in New York, California and North Carolina.

Federal prosecutors say Van Dyke was directly involved in Operation Absolute Resolve, the U.S. military mission that culminated in the capture of Maduro and his wife on Jan. 3. Despite signing nondisclosure agreements related to the operation, he still placed numerous Polymarket bets totalling around $34,000 in the days leading up to Maduro's ouster, the government claims.

When the prediction markets resolved, Van Dyke's shares were worth more than $400,000, prosecutors say. 

Van Dyke has retained a high-profile medley of attorneys to defend him, including Zach Intrater, Tina Glandian and Mark Geragos. 

Outside of the courthouse, Geragos called Van Dyke an "American hero" and a man who is charged "with something that is not a crime."

"I think that part of what people have to understand about this young man is that he has spent virtually 98% of his adult life serving this country in an exemplary manner," Geragos said. "He has reached the apex of that service, and with any luck, we will return him quickly to where he belongs, which is protecting the world from all kinds of threats."

Geragos added that the prosecution is "misplaced" and the defense plans to file motions challenging the indictment and its jurisdiction.

Van Dyke, clad in a dark suit and a pair of sunglasses, exited the courthouse out a side entrance as Geragos spoke. He did not respond to questions from reporters. 

Initially arrested Friday in his home state of North Carolina, Van Dyke is due back in Manhattan's federal courthouse on June 8 for a status conference under U.S. District Judge Margaret Garnett, the Joe Biden appointee overseeing the proceedings. 

Van Dyke's precise involvement in the Maduro mission remains unclear. He is still "associated" with the U.S. military, according to Intrater.

"He is on leave at this point," Intrater told the judge Tuesday, but suggested the situation remains "unsettled" and could change. 

Assistant U.S. Attorney Ryan Finkel told the court the case has only a "moderate amount" of discovery. But the classified nature of some of that evidence could complicate its disclosure. Garnett encouraged the government to have the information "declassified to the greatest extent possible."

"The events covered by the classified information have occurred," she said, referring to Maduro's capture. 

According to the government, Van Dyke, who was stationed on Fort Bragg near Fayetteville, North Carolina, split his wagers across several different Polymarket contracts. One posed whether the U.S. would "invade Venezuela" by Jan. 31. Another was simply titled "Maduro out" by the same date. 

Prosecutors say he then tried to cover his tracks by asking Polymarket to delete his account after he cashed out, falsely claiming he had lost access to his email address, and by moving the funds between several cryptocurrency accounts.

The case comes amid an increasing nationwide push to regulate prediction markets, which some lawmakers and public officials have likened to unregulated gambling. Platforms like Polymarket have also raised widespread concern for allowing users to put money on real-world events like geopolitical conflicts - including Maduro's capture.

Maduro remains in federal prison in Brooklyn alongside his wife, Cilia Adela Flores De Maduro. The Trump administration made the controversial move to capture them after indicting the couple on narco-terrorism charges, to which they have pleaded not guilty. 

Source: Courthouse News Service