Former Congressman George Santos has settled with the CFTC for $35,000 following an investigation into his trades on Kalshi tied to the State of the Union.
Former Congressman George Santos has agreed to a $35,000 settlement with the Commodity Futures Trading Commission following a federal investigation into trades he placed on prediction platform Kalshi.
Key Takeaways
- Santos will forfeit $17,569 in trading gains plus an additional $17,500 penalty
- The case centered on markets tied to his attendance at February’s State of the Union address
- Santos admitted no wrongdoing as part of the settlement
What Happened
The CFTC, the federal regulator overseeing prediction markets, confirmed the settlement this past week. Santos will return the profit he made trading on Kalshi and pay a matching penalty on top of it, while agreeing not to violate the Commodity Exchange Act or CFTC operating rules going forward.
The trades in question involved a Kalshi market letting users bet on whether Santos would show up to President Trump’s State of the Union address in February. A day before the event, Santos posted a video declaring he’d be in the gallery for the speech, a claim that pushed his attendance probability sharply higher on the platform.
He never showed. Shortly after the address began, Santos told followers online he was stuck at an airport watching the speech on television instead. His trading history showed he had positioned himself to profit from exactly that outcome, walking away with more than $17,500 as traders who bought into his in-person claim lost out.
Santos, whose seven-year sentence for wire fraud and identity theft was commuted by President Trump after roughly three months served, had also been working with Polymarket at the time. Kalshi’s main rival cut ties with him once reports of the investigation surfaced.
The Response
Santos hasn’t admitted fault. His attorney framed the settlement as a practical decision to avoid a longer legal fight rather than an acknowledgment of wrongdoing, and maintained that Santos had genuinely intended to attend.
Santos addressed the episode himself on his podcast back in March, brushing off the scale of what happened. He acknowledged some traders lost money while others came out ahead, calling it evidence of how easily these markets can be shaken.
Why It Matters
Kalshi’s own integrity monitoring system flagged the suspicious trading pattern that triggered the investigation in the first place. The platform bars insider trading outright and has said it will pursue enforcement of its own and try to make affected traders whole.
The episode lands at a moment when prediction markets are bigger business than ever. Kalshi and both Polymarket platforms combined for a record $50.6 billion in trading volume in July, driven largely by World Cup betting activity. That kind of volume brings more scrutiny, and this settlement is a reminder that prediction markets, however they’re regulated, aren’t immune to the same manipulation concerns that dog traditional financial markets.