Former U.S. Congressman George Santos has agreed to pay $35,000 to resolve a federal investigation into suspicious trades he placed on the prediction marketplace Kalshi, betting against his own publicly stated plans to attend President Donald Trump’s address to Congress.
The settlement, reached with the Commodity Futures Trading Commission (CFTC), the federal agency that oversees derivatives markets, includes the return of more than $17,000 Santos earned from the trades and a fine of $17,500. Regulators also imposed a three-year trading ban on the onetime Republican lawmaker from New York.
Santos, who did not admit to any wrongdoing, said he settled to “put this matter behind him.” His lawyer, Joseph Murray, said in a statement shared on the social platform 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, because it is not one.”
The dispute stems from Trump’s February speech to Congress. In the days beforehand, Santos spoke repeatedly about his intention to attend in person. Yet minutes into the address, he posted on X claiming he had been held up at the airport and could not reach Capitol Hill.
Social media users quickly flagged the timing, noting that Kalshi had priced the odds of Santos attending at close to 75%. By betting that he would not show up, Santos stood to profit from a market outcome he was in a position to control.
At the time, Santos brushed off the criticism, remarking on his podcast, “I guess people lost money.”
Kalshi, which reported Santos to regulators, said it would pursue its own enforcement action and work to reimburse affected traders if monetary penalties are recovered. Prediction markets, which allow users to wager on the outcomes of real-world events, have drawn growing regulatory scrutiny over concerns about manipulation and insider knowledge.
The case adds to the legal troubles trailing Santos, who was expelled from the House of Representatives in 2023 and later faced sentencing in a separate federal fraud case. His brief and turbulent congressional tenure became emblematic of the risks posed when public figures hold outsized influence over markets tied to their own actions.
The settlement underscores intensifying oversight of the fast-growing prediction market sector, where regulators are increasingly wary of participants trading on events they can personally influence. Kalshi’s cooperation with authorities signals a broader industry push to police manipulative behavior as these platforms attract wider public participation.