Former U.S. Rep. George Santos has settled a case with the Commodity Futures Trading Commission, agreeing to pay $35,069.98 and accept a three-year ban from trading. The CFTC found that Santos manipulated a prediction market on Kalshi that was tied to his own attendance at the State of the Union address.
A bet on his own attendance
According to the CFTC order, Santos first bought “Yes” contracts betting he would attend the speech. He then switched to “No” contracts while continuing to tell the public he planned to go. The switch allowed him to profit from the price difference. The CFTC said Santos’s public statements about his attendance were false and misleading, and that he used them to influence the market.
How the scheme worked
Kalshi is a platform where users trade contracts on the outcome of real-world events. In this case, the market asked whether Santos would attend the State of the Union. Santos initially bought contracts that paid out if he attended. After the price of those contracts rose, he sold them and bought contracts betting he would not attend. He then continued to tell reporters and the public that he planned to be there, even though he had already decided not to go. The CFTC said this was a classic manipulation: using false information to move a market.
The settlement terms
Santos agreed to pay $35,069.98, which the CFTC said represents the profits he made from the scheme plus a penalty. He also accepted a three-year ban from trading on any CFTC-regulated market. The settlement does not require Santos to admit or deny the findings. The CFTC said the case is part of its effort to police emerging prediction markets, which have grown in popularity.
What’s next for Santos
The settlement closes the CFTC’s investigation into Santos’s trading on Kalshi. Santos, who no longer serves in Congress, still faces other legal troubles. The CFTC case is one of several actions against him. The trading ban takes effect immediately and will last through 2027.
