George Santos, the disgraced former congressman, has agreed to a $35,000 settlement with the federal Commodity Futures Trading Commission (CFTC) over an investigation into his suspicious trades on the prediction marketplace Kalshi. The settlement resolves accusations that Santos engaged in "manipulative activity" by placing bets on whether he would attend President Donald Trump’s State of the Union address, effectively betting against his own plans.
The settlement requires Santos to disgorge more than $17,000 he earned from the unlawful trading and pay an additional civil penalty of $17,500. Furthermore, the CFTC has imposed a three-year ban on Santos from participating in any CFTC-regulated exchanges. Santos, through his attorney Joseph Murray, stated that he chose a prompt resolution to put the matter behind him and denied any admission of wrongdoing.
Kalshi, the prediction market platform, had initially flagged Santos's activity and reported him to federal authorities. The CFTC found that Santos opened his Kalshi account in February 2026, funding it with $7,000, and traded exclusively on a market predicting his attendance at the State of the Union. He engaged in a two-phase scheme, first accumulating "Yes" contracts and making public statements that boosted the price, then switching to "No" contracts while making public statements that encouraged a price drop, ultimately profiting from these moves. This marks the first time a federal sanction has been issued for political prediction market manipulation.
The case highlights a unique form of manipulation where Santos controlled the outcome of the event he was betting on. While the $17,569.98 disgorged goes to the CFTC, not directly to the traders who lost money, Kalshi has committed to pursuing its own enforcement action and potentially reimbursing affected traders. The CFTC's actions demonstrate its intent to pursue manipulators while also preserving the infrastructure of prediction markets.
