The Department of Justice has arrested Gannon Ken Van Dyke, an Army special forces member, for allegedly using classified information about the capture of Venezuelan president Nicolás Maduro to profit over $400,000 on prediction markets.

Van Dyke’s actions raise serious ethical and legal concerns. The Commodity Exchange Act was violated, his fellow soldiers may have been endangered, and he could face up to 25 years in prison if convicted.

Lawmakers are now calling for stricter regulations on prediction markets after this case and others that have raised red flags about insider trading. California, Illinois and New York have already banned state employees from such trades.

The prediction market industry is under intense scrutiny as traders continue to make high-stakes wagers based on confidential information. It’s a fine line between smart speculation and illegal manipulation.