George Santos Settles Federal Investigation Over Kalshi Trades

Former congressman George Santos has agreed to pay $35,000 to resolve a federal investigation regarding his actions on the prediction marketplace, Kalshi. Santos, a former Republican congressman from New York, placed bets that contradicted his plans to attend President Donald Trump’s State of the Union address.

The Commodity Futures Trading Commission (CFTC) handled the investigation. Santos stated he chose to settle to avoid prolonged litigation, without admitting to any wrongdoing. His lawyer, Joseph Murray, supported this, stating the settlement was a practical choice rather than an admission of guilt.

The settlement includes returning over $17,000 Santos earned from the trades, alongside a fine of $17,500. Additionally, Santos faces a three-year trading ban imposed by the CFTC. Kalshi, which reported Santos to regulators, plans to pursue its own enforcement action and reimburse affected traders if possible.

Prior to Trump’s February speech, Santos frequently mentioned his intention to attend. However, during the event, he posted online that he was delayed at the airport and could not reach Capitol Hill. Social media users pointed out that Kalshi had placed Santos’ attendance likelihood at nearly 75%.

Santos dismissed public criticism on his podcast, emphasizing market unpredictability. Nonetheless, the federal probe led rival prediction platform Polymarket to sever ties with Santos in June.

In his statement, Santos’ lawyer emphasized the sincerity of Santos’ plans, blaming a winter storm for altering them. He stated that Santos had no intention of deceiving anyone or manipulating the market.

Although Santos had gained political attention after winning a congressional seat in New York, his fabricated life story fell apart. He was removed from Congress, facing charges of wire fraud and identity theft related to his campaign funding. After pleading guilty, he served a brief sentence before receiving clemency from Trump last year.