The Department of Justice and the Commodity Futures Trading Commission are reportedly looking into former Republican congressman George Santos for alleged insider trading on the prediction market platform Kalshi. This investigation stems from trades made by Santos concerning his own attendance at a significant political event.
Key Takeaways
- George Santos is under investigation by the DOJ and CFTC for alleged insider trading on Kalshi.
- The trades reportedly involved betting against his own public claims about attending the State of the Union address.
- Santos allegedly profited tens of thousands of dollars from these trades.
- Kalshi detected the suspicious activity, froze his account, and referred the matter to federal authorities.
- Santos has denied knowledge of the probe and has reportedly been evading requests for an interview from Kalshi.
The situation emerged when Santos, in February, posted a video stating his intention to attend the State of the Union address. This public declaration reportedly caused the odds on a Kalshi market predicting his attendance to increase significantly. Unbeknownst to the public, Santos had allegedly placed wagers that he would *not* be present. Following his absence and subsequent social media posts about watching the event from an airport, the odds on Kalshi collapsed, allowing him to cash out his bets for a substantial profit, estimated to be in the tens of thousands of dollars. Kalshi’s internal systems flagged these trades, leading to his account being frozen and the case being escalated to the CFTC and DOJ.
Santos’s History and Response
This development adds another layer to the already controversial career of George Santos. The former New York congressman was expelled from the House of Representatives in December 2023 amid allegations of fabrications about his background and facing federal fraud charges. He was reportedly released from federal prison in late 2025. When approached by NPR for comment on the investigation, Santos claimed ignorance, stating, “Well, that’s news to me.” He declined to confirm if he even possessed a Kalshi account. Interestingly, he also claimed a personal acquaintance with Kalshi co-founder Luana Lopes Lara, describing her as a “fellow brazilian.” However, sources familiar with Kalshi’s internal investigation have indicated to NPR that Santos does not know Lara and has been actively avoiding interviews with the exchange.
Kalshi’s Enforcement Actions
This is not the first time Kalshi has taken action against users for suspicious trading activity. In April, the exchange fined and suspended three congressional candidates for betting on the outcomes of their own political races. One such case involved a candidate who allegedly bet on whether they would run for office before publicly announcing their candidacy. While those instances were treated as internal rule violations, resulting in bans, fines, and the forfeiture of profits, Kalshi had previously stated that more serious matters could be referred to regulatory bodies like the CFTC or DOJ. The investigation into George Santos marks the first major referral that has resulted in a confirmed federal inquiry.
Original article : www.bankless.com