Prediction market platform Kalshi has permanently banned former Rep. George Santos and fined him $71,356 for manipulating a market tied to his own attendance at the State of the Union address. The action marks Kalshi's first lifetime ban of a former member of Congress.
According to a disciplinary notice dated Aug. 28, Santos placed large trades between Feb. 2 and Feb. 25 in a market whose outcome depended on whether he would attend the event. As someone capable of influencing that outcome, Santos was prohibited from trading the market under exchange rules.
Kalshi's compliance department found that Santos made public statements about his attendance, some of them false or misleading, intended to move the price of the market's "Yes" and "No" contracts. These statements did move prices, allowing him to profit $17,839.57. The conduct violated multiple rules, including prohibitions on market manipulation, trading with influence over an event's outcome, and using deceptive schemes to defraud. Santos was also cited for failing to cooperate with the investigation.
The ban comes amid growing scrutiny over insider trading and integrity risks in prediction markets. The CFTC recently fined a former White House teleprompter operator for trading on advance knowledge of presidential speeches. A video editor associated with MrBeast was fired amid a Kalshi insider-trading probe, and a U.S. soldier was charged over alleged trades on Polymarket, a rival crypto-native prediction market platform.
Prediction markets allow users to buy and sell contracts tied to real-world events, with contract prices reflecting perceived odds of outcomes. Platforms like Kalshi, which is CFTC-regulated, and Polymarket have grown significantly in popularity and trading volume over the past year, attracting institutional interest as event contracts expand into the mainstream.
