Kalshi Permanently Bans George Santos Over State of the Union Market Manipulation

Prediction market Kalshi has permanently banned former Rep. George Santos, finding that he manipulated a market tied to his own attendance at the State of the Union address and pocketed nearly $18,000 in the process.

In a disciplinary notice dated Aug. 28, Kalshi's compliance department said Santos placed a series of large trades between Feb. 2 and Feb. 25 in a market whose outcome hinged on whether he would attend the event.

As someone capable of influencing that outcome, Santos was barred from trading it under exchange rules. He then made a string of public statements about his attendance, some of them false or misleading, in a bid to move the price of the "Yes" and "No" contracts, according to the notice.

The compliance department found that Santos made those statements intending to manipulate prices and that they did in fact do so, letting him profit $17,839.57 in the targeted markets. Kalshi said the conduct violated multiple rules, including prohibitions on market manipulation, trading with influence over an event's outcome, and using deceptive schemes to defraud. He was also cited for failing to cooperate with the investigation.

Kalshi permanently suspended Santos from direct or indirect access to the platform and imposed a penalty of $71,356. It marks the first lifetime ban the exchange has handed to a former member of Congress.

Prediction markets let users bet real money on the outcome of real-world events, from elections to sports to economic data, by buying "Yes" or "No" contracts whose prices move with the perceived odds. Platforms like Kalshi, a CFTC-regulated exchange, and crypto-native rival Polymarket have exploded in popularity over the past year, drawing billions in trading volume, mainstream attention, and a wave of institutional interest as event contracts go mainstream.

Today’s action from Kalshi is the latest sign of the insider-trading and integrity risks dogging prediction markets as they boom. The CFTC recently fined a former White House teleprompter operator for trading on advance knowledge of presidential speeches, a MrBeast video editor was fired amid a Kalshi insider-trading probe, and a U.S. soldier was charged over alleged Polymarket trades.

Kalshi has since rolled out new safeguards to address the mounting scrutiny.