Former Congressman George Santos to Pay $35,000 Settling CFTC Probe Over Unlawful Kalshi Trades

Former U.S. Congressman George Santos has agreed to pay $35,000 to settle a federal investigation into manipulative trading on the prediction market platform Kalshi, the Commodity Futures Trading Commission announced. The settlement stems from bets Santos placed on whether he would attend President Trump’s State of the Union address in February, a contract he is accused of manipulating for personal profit.

The case marks one of the highest-profile enforcement actions the CFTC has brought since prediction markets like Kalshi and Polymarket surged into the mainstream, and it underscores how closely regulators are now watching event contracts tied to real-world political outcomes.

How the Alleged Manipulation Unfolded

According to the CFTC, Santos opened a Kalshi account on February 11 and began trading contracts tied to his own attendance at the State of the Union. From February 12 to February 22, he wagered roughly $6,700 on the position that he would attend the address. The day before the speech, Santos posted on X that he planned to be “there for the State of the Union in the gallery,” a statement regulators say pushed the market’s odds of his attendance up to as high as 75%.

The next day, Santos did not attend, instead posting that he was watching from an airport. The CFTC said that after his social media posts moved the contract price in his favor, Santos profited by trading against his own stated intentions, ultimately netting over $17,500 in what the agency described as manipulative activity.

Terms of the Settlement

Under the agreement, Santos must surrender the $17,569.98 in profits the CFTC says he earned from the trades, plus a separate $17,500 civil monetary penalty, for a combined total of $35,000. He also accepted a three-year ban from trading on CFTC-regulated markets and agreed not to further violate the Commodity Exchange Act or related regulations.

Santos did not admit to any wrongdoing as part of the deal. His attorney, Joseph Murray, said in a statement posted to X that Santos “chose a prompt, practical resolution, rather than protracted, costly litigation, and that choice should not be mistaken for admission of any wrongdoing.” Murray added that Santos had a “genuine intention” to attend the address, saying he had booked a hotel and a flight before a winter storm disrupted those plans.

Kalshi’s Role and the Fallout

Kalshi, which offers regulated event contracts on outcomes ranging from elections to prediction markets across sports and pop culture, was the party that flagged the suspicious trading activity to federal regulators in the first place. The company confirmed it will pursue its own separate enforcement action against Santos for violating exchange rules and said it intends to work toward reimbursing traders who lost money as a result of his positions, if penalties are recovered.

The scrutiny already cost Santos a foothold on a rival platform. Polymarket cut ties with him in June after the CFTC probe became public, according to reporting on the case. The episode adds another chapter to Santos’ turbulent post-congressional career; his original seven-year prison sentence for wire fraud and identity theft was commuted by President Trump earlier this year after he served roughly three months.

What It Means for Prediction Markets

The settlement lands at a moment when prediction markets are drawing intense regulatory and public attention, with platforms like Kalshi and Polymarket expanding rapidly into sports and political contracts once thought to sit outside traditional gambling oversight. Enforcement actions like this one signal that the CFTC intends to treat manipulation on these platforms with the same seriousness as it would in traditional derivatives markets, even when the underlying event is as unconventional as a lawmaker’s own attendance at a speech.