Crypto Legal News Roundup: FTX-Linked Case, Santos Prediction Market Penalty, and Polymarket Insider Trading Defense

Michelle Bond Seeks to Exclude Husband Ryan Salame's Guilty Plea in Campaign Finance Case

Michelle Bond, the wife of former FTX Digital Markets co-CEO Ryan Salame, has asked a federal court to bar prosecutors from introducing her husband's guilty plea as evidence in her campaign finance trial.

In a Friday filing with the US District Court for the Southern District of New York (SDNY), Bond's legal team requested that the court preclude evidence related to Salame, who is currently serving a 90-month sentence after pleading guilty in 2023. Bond faces charges alleging that her unsuccessful 2022 congressional campaign in New York was partially financed by FTX-linked contributions facilitated by Salame.

Bond's motion specifically asked the court to exclude Salame's guilty plea and related plea materials, in which the former executive admitted to making "political contributions in [his] name that were funded by transfers from the bank accounts" of an entity tied to FTX.

"The Court should preclude the government from introducing or referring to Mr. Salame's guilty plea or any related plea materials, because their minimal probative value is substantially outweighed by the risk of unfair prejudice to Ms. Bond," the filing stated.

Bond's attorneys further argued: "[...] Mr. Salame's plea materials lack any probative value as to Ms. Bond's guilt, knowledge, or intent. Mr. Salame's plea is an admission of his own guilt, not evidence of Ms. Bond's state of mind or participation in any charged offense."

The motion also asked the court to include information about Bond's "contemporaneous divorce and custody proceedings," contending that although she and Salame were not married at the time of the alleged offense, the former FTX executive should not be treated as an "ordinary 'individual' donor" to her campaign.

The case is among the latest criminal proceedings involving individuals connected to the defunct crypto exchange, which collapsed in 2022. Salame, former FTX CEO Sam Bankman-Fried, and former Alameda Research CEO Caroline Ellison were each sentenced to prison for their roles in the misuse of customer funds and related charges. Bankman-Fried received a 25-year sentence, while Ellison was sentenced to two years.

Former Congressman George Santos Ordered to Pay Over $35,000 for Kalshi Prediction Market Trades

The US Commodity Futures Trading Commission (CFTC) ordered former New York Representative George Santos to pay a $17,500 civil monetary penalty and $17,570 in disgorgement of profits derived from trades on prediction market platform Kalshi.

Santos, who was expelled from Congress in 2023, traded event contracts tied to his attendance at the 2026 State of the Union address in Washington, DC.

"While buying and selling positions in this market, Santos posted on social media about his plans to attend or not attend the SOTU," the CFTC stated. "In his social media posts, Santos made a series of material misrepresentations and omissions about whether he would attend the SOTU. After these posts, the SOTU contract prices moved in a direction that was favorable to Santos' positions which allowed him to make over $17,500."

Under the CFTC order, Santos is prohibited from trading on prediction market platforms for three years. He was previously sentenced to 87 months in prison for wire fraud and aggravated identity theft in 2025 but served only three months before his sentence was commuted by US President Donald Trump.

The enforcement action highlights the CFTC's expanding focus on prediction market manipulation. Kalshi, which operates as a CFTC-regulated exchange, received approval to offer event contracts on real-world outcomes, placing it under the commission's oversight. The Santos case demonstrates how regulators can pursue manipulation claims even on relatively novel trading instruments.

US Soldier Gannon Ken Van Dyke Moves to Dismiss Polymarket Insider Trading Charges

Gannon Ken Van Dyke, a US soldier accused of earning more than $400,000 through Polymarket event contracts using nonpublic information, has filed a motion to dismiss his indictment.

According to the US Justice Department, Van Dyke was involved in a January military operation aimed at removing Venezuelan President Nicolás Maduro. He allegedly leveraged insider knowledge from the operation to bet on whether Maduro would be removed from power, resulting in criminal charges filed in April.

In a Friday filing with the SDNY, Van Dyke's legal team submitted a 51-page memorandum supporting dismissal on multiple legal theories. Central to their argument is the claim that the Commodity Exchange Act (CEA)—which underpins three of the charges—is "ambiguous" in its treatment of event contracts as "swaps."

While the CFTC under Chair Michael Selig has asserted "exclusive jurisdiction" over prediction markets on the basis that event contracts qualify as swaps, Van Dyke's lawyers argued that this lack of statutory clarity warrants dismissal of at least some charges.

"If Congress, executive branch agencies, and courts all find the 'swap' definition ambiguous, how can ordinary citizens have fair notice that prediction market wagers are covered by the CEA?" the filing asked. "They cannot."

The case carries potentially significant implications for lawmakers and government officials who participate in prediction markets. Notably, a teleprompter operator for President Trump reportedly earned more than $100,000 trading Kalshi event contracts connected to the president's speeches.

The defense's statutory ambiguity argument touches on a broader debate over how prediction markets should be classified under US law. Unlike Kalshi, which operates as a CFTC-regulated designated contract market, Polymarket has faced its own regulatory challenges, including a 2022 CFTC settlement that required the platform to block US users. The outcome of Van Dyke's case could influence how prosecutors and regulators approach similar matters involving prediction market participants trading on nonpublic information.

Van Dyke has pleaded not guilty to all charges. According to a schedule filed in June, his trial could begin in late 2026 or early 2027.

Source: CryptoNews