Summary
- George Santos' trading activities on Kalshi have prompted investigations by the DOJ and CFTC after the platform froze his account, according to NPR.
- He reportedly bet that he would not attend Trump's State of the Union address while publicly claiming he would, earning him tens of thousands of dollars.
- This inquiry is part of a broader scrutiny of prediction markets, which have faced increased insider trading investigations recently.
Investigations by two federal agencies are underway concerning trades made by George Santos, a former congressman who was pardoned, on the prediction market platform Kalshi. These trades were allegedly placed against his own attendance at President Donald Trump's State of the Union address, despite his public assurances that he would be present, as reported by NPR.
Kalshi detected the suspicious activity, subsequently suspended Santos' account, and referred the issue to the Commodity Futures Trading Commission and the Department of Justice, according to sources familiar with the situation.
According to NPR, Santos earned tens of thousands of dollars by misleading bettors about his intentions for February, based on information from three individuals with direct knowledge of the trades who were not authorized to speak publicly.
This report emerges amid growing concerns regarding prediction markets nationwide, where insider trading allegations have already led to criminal charges and demands for stricter regulation.
The day prior to Trump's address, Santos tweeted, "I'm going to be there for the State of Union in the gallery, guys," which likely increased the odds of his attendance.
However, during the address, he tweeted, "Watching SOTU from an airport tv was not part of the plan! FML," while sources indicated he had already bet against his own presence at the event.
Watching SOTU from an airport tv was not part of the plan! FML 😡🤬
— George Santos (@Georgesantos) February 24, 2026
When questioned about the investigation, Santos remarked to NPR, "Well, that's news to me," and did not confirm or deny having a Kalshi account, stating, "I'm not saying yes, I'm not saying no."
Requests for comments from George Santos, the CFTC, the DOJ, and Kalshi went unanswered by Decrypt.
Regulatory Actions
Recently, federal prosecutors charged Google engineer Michele Spagnuolo with commodities fraud, wire fraud, and money laundering related to approximately $2.75 million in bets on Polymarket that generated around $1.2 million, allegedly using confidential internal "Year in Search" data.
This case marks the second federal prosecution related to prediction markets, following Army Master Sergeant Gannon Ken Van Dyke, who pleaded not guilty to charges of using classified information to win bets on the capture of Venezuelan leader Nicolás Maduro.
In a parallel effort, lawmakers, led by House Oversight Chair James Comer (R-KY), initiated an insider trading investigation into Kalshi and Polymarket, requesting records related to their KYC controls and war-related markets after a New York Times article highlighted over 80 suspicious trades on Polymarket.
According to Yuriy Brisov, a partner at Digital & Analogue Partners, the allegations against Santos might not align perfectly with conventional insider trading laws. He noted that unlike recent cases, Santos did not "misappropriate anything," suggesting that his actions resemble market manipulation by creating a false signal to influence prices.
Brisov mentioned, "Trading on your own conduct is a category that the inherited rulebook never anticipated," emphasizing that existing laws primarily target the misuse of confidential information rather than bets related to an individual's own actions.
He added that the issue lies not with prediction markets themselves but with restricting participants who can influence outcomes. He argued that recent measures implemented by Kalshi and Polymarket were effective in detecting Santos' activities.
In February, Kalshi revealed that it had imposed fines and suspended a MrBeast employee and a California political candidate for betting on outcomes they could influence, forwarding both cases to the CFTC.
Brisov concluded, "The lesson here is not that prediction markets are lawless. It is that the platforms are the fastest regulators in the room."
Connections to Crypto
George Santos has had previous interactions with the cryptocurrency sector.
Executives from the now-defunct exchange FTX, including former co-CEO Ryan Salame, were among the top contributors to his congressional campaign in 2022. Two years later, Santos briefly supported a Solana meme coin before distancing himself from it shortly thereafter.
The New York Republican took his oath in Congress in January 2023 after a campaign that was later revealed to include many misrepresentations about his background. In May 2023, he faced federal charges including wire fraud, money laundering, and theft from campaign contributors.
He was expelled from Congress in December 2023 and subsequently sentenced to over seven years in federal prison.
In October, Trump commuted Santos' sentence, allowing him to be released after serving four months in prison.