Former Congressman George Santos has agreed to a $35,000 settlement with the Commodity Futures Trading Commission following an investigation into his trading activities on Kalshi, a CFTC-regulated prediction market platform. The settlement announced Friday resolves allegations that Santos engaged in market manipulation by placing bets that contradicted his own public statements about attending President Donald Trump’s 2026 State of the Union address.
According to the CFTC, Santos placed wagers on Kalshi predicting he would not attend the State of the Union in February while simultaneously posting on social media that he planned to be present. On February 23, the day before the address, Santos posted on X that he would be in the gallery. However, the next day, he posted from an airport, saying he was watching the speech remotely instead. This reversal caused the odds on the prediction market to shift in his favor, resulting in profits.
Under the settlement terms, Santos must relinquish $17,569.98 in profits he made from the trade and pay a civil penalty of $17,500. The former congressman is also banned from trading on prediction markets for three years.
The CFTC stated that Santos made material misrepresentations and omissions about whether he would attend the State of the Union in his social media posts while simultaneously buying and selling positions in the market. After his posts caused market prices to move favorably toward his positions, Santos profited by more than $17,500.
The investigation began when Kalshi’s compliance team detected unusual trading patterns associated with Santos’s account. The platform immediately froze his account and referred the matter to both the CFTC and the Department of Justice. Kalshi CEO Tarek Mansour stated that the system flagged Santos’s attempted manipulation “within seconds” of detection.
In his settlement statement, Santos’s attorney Joseph W. Murray argued that the former congressman agreed to resolve the matter to “put this matter behind him” while maintaining that the settlement should not be mistaken for an admission of wrongdoing. Murray stated that Santos “settled without admitting any of the Commission’s allegations, findings, or conclusions” and that the choice of a prompt resolution over protracted litigation should not be interpreted as an acknowledgment of misconduct.
However, sources with direct knowledge of the case told news outlets that Santos deliberately misled the public and profited from that deception. Three people familiar with his trades confirmed that Santos intentionally placed bets contrary to his public statements.
The case has added to growing scrutiny of prediction markets like Kalshi and Polymarket, which allow users to bet on real-world outcomes. Regulators and enforcement officials have become increasingly concerned about the potential for manipulation, particularly by individuals with political influence or insider knowledge. Kalshi announced that it will pursue its own enforcement action against Santos for violating exchange rules and stated it would work to reimburse affected traders if monetary penalties are recovered.
Santos has had a troubled legal history in recent years. He was expelled from Congress in December 2023 after a House Ethics Committee investigation found credible evidence of financial crimes. He subsequently pleaded guilty to wire fraud and aggravated identity theft in connection with charges related to his campaign and personal conduct. He was sentenced to 87 months in federal prison but served less than four months before President Trump commuted his sentence in October 2025.
The Kalshi settlement represents a notable enforcement action highlighting the CFTC’s willingness to pursue individuals who attempt to manipulate prediction markets. It signals regulatory concern about potential market abuse on these platforms as their popularity grows among bettors and investors seeking to wager on political events, entertainment outcomes, and other real-world developments.