Key facts
- DOJ and CFTC are investigating George Santos for alleged insider trading on Kalshi.
- Santos allegedly bet against his own attendance at a State of the Union address.
- Kalshi detected suspicious trading activity and alerted law enforcement.
- Polymarket is terminating its contract with Santos.
- Santos' prison sentence was previously commuted by President Trump.
U.S. federal regulators, including the Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC), are investigating former U.S. Representative George Santos for alleged insider trading on the prediction market platform Kalshi. The investigation stems from suspicious trading activity detected by Kalshi, which reportedly involved Santos betting against his own attendance at a State of the Union address. According to sources, Santos had publicly posted about attending the event, which influenced the market, and subsequently placed bets predicting his non-attendance. Kalshi flagged these trades as potentially suspicious, froze Santos' account, and alerted the DOJ and CFTC around late February. Polymarket, with whom Santos had an influencer role, is terminating its contract with him due to these revelations. This probe adds to Santos' existing legal troubles; he was previously expelled from Congress and had his 87-month prison sentence for fraud and identity theft commuted by President Donald Trump. The situation highlights growing scrutiny of prediction market platforms like Kalshi and Polymarket due to compliance challenges and concerns over market abuse. In March, Democratic lawmakers introduced legislation to ban prediction market bets on military operations and other sensitive government actions.