Kalshi bans George Santos for life over alleged insider trading in prediction markets

Prediction-market operator Kalshi has permanently barred former US congressman George Santos from trading on its platform.

The company alleged that Santos, who was expelled from Congress following a series of fraud and identity-theft charges, placed bets in February related to his own attendance at US President Donald Trump's State of the Union address, according to a notice of disciplinary action.

Kalshi said its compliance team concluded his activity showed signs of insider dealing, prompting the lifetime ban. It said it was acting independently without waiting for external enforcement action.

Santos on X thanked Kalshi for the ban and said "Let's see how much longer you guys are around for".

The BBC has contacted Santos for comment.

In 2025, Trump ordered the release of Santos, who had been sentenced to a seven-year prison term for wire fraud and identity theft. He had served three months.

In July, Santos agreed to pay $35,000 to settle a federal investigation by the Commodity Futures Trading Commission into his State of the Union trades.

Kalshi, alleging Santos used non-public information to place bets, issued a penalty of $71,356 (£38,000).

The disciplinary moves come at a moment when prediction markets – which allow users to wager on outcomes ranging from elections to economic indicators – are facing heightened scrutiny.

Both Kalshi and rival Polymarket have reported an uptick in unusual trading patterns, forcing platforms to strengthen monitoring systems and respond more aggressively to potential misconduct.

Kalshi said Santos's case was referred to federal authorities earlier this summer after internal systems flagged suspicious behaviour linked to his account.

The company said the case centered on his trades in a market tied to whether he would attend Trump's address – an event he could directly influence.

Its compliance team found he placed a series of sizeable bets between 2 and 25 February, some of which were based on false or misleading public statements about his plans, according to the company.

His comments moved contract prices, and he ultimately earned $17,839.57 from the trades.

Santos has denied wrongdoing in various matters but has admitted to stealing identities of nearly a dozen people, including next of kin. He pleaded guilty to wire fraud and aggravated identity theft and served three months in prison before Trump commuted his sentence last year.

He embellished much about his biography in the run-up to his election to Congress in 2022. The former lawmaker was only the sixth in US history to be expelled from Congress.

The Kalshi episode underscores the growing compliance burden facing prediction markets as they attract more users and move closer to mainstream products. Regulators have signalled that platforms will be expected to meet higher standards as the industry matures, particularly when political or economic events are involved.