Federal authorities are investigating former New York congressman George Santos for allegedly using inside information to profit on the prediction market Kalshi. According to people with direct knowledge of his trades, Santos placed wagers about his own attendance at President Trump’s State of the Union address and then posted public messages that influenced market odds — actions that reportedly yielded him tens of thousands of dollars.
In February, a day before the speech, Santos posted a video on social media saying he would be in the gallery for the State of the Union. That confirmation sent betting odds on Kalshi shifting toward his attendance. But Santos did not appear; during the address he posted that he was watching from an airport TV. Those comments coincided with a sharp drop in the market odds.
Sources say Santos had already placed bets on Kalshi that he would not attend the speech. Kalshi detected the trades, froze his account and referred the matter to the Commodity Futures Trading Commission. The CFTC, in turn, and the Department of Justice both opened investigations, according to a person familiar with Kalshi’s probe. Kalshi declined to comment, and the CFTC and DOJ did not respond to requests for comment.
Reached by reporters, Santos said the investigation was “news to me” and would not confirm whether he had an account, saying, “I’m not saying yes, I’m not saying no.” He also said he planned to call Kalshi co-founder Luana Lopes Lara — whom he described as “a fellow Brazilian” he knows personally — to ask whether an inquiry was underway. A person familiar with Kalshi’s internal review said Santos does not know Lara. Kalshi has reportedly sought to interview Santos, but he has not cooperated.
Santos’s alleged trading activity comes after his high-profile fall from office. Elected to Congress in 2022, he was later found to have fabricated large parts of his biography — including claims about his education, family history and religious background. In May 2023 federal prosecutors charged him with 13 counts, including wire fraud, money laundering and stealing from political donors. He was sentenced to more than seven years in prison but served roughly four months after President Trump commuted his sentence last October.
The case also highlights growing scrutiny of prediction markets, which allow bets on events ranging from auction prices to geopolitical developments. Lawmakers and regulators have become increasingly concerned about the potential for insider trading and market manipulation on platforms like Kalshi and Polymarket. Recent prosecutions include charges against a U.S. Army Special Forces soldier accused of making more than $400,000 on bets about the capture of Venezuelan leader Nicolás Maduro, and a Google employee charged with using confidential company data to win over $1 million on Polymarket trades. Polymarket operates from Panama.
Traders and online community members noticed the swings tied to Santos’s messages. On chat forums, some users expressed outrage after losing money, accusing Santos of a “rug pull” — a slang term for sudden market collapse driven by deceptive actions.
Although Santos’s Kalshi account is frozen, his name continues to draw attention on the platform. In late April, nearly $90,000 was wagered on a Kalshi market about which words Santos would say during a Newsmax interview. He used the word “rumor” but avoided saying “corruption.”
Regulators are still investigating whether Santos’s posts and trading constitute illegal insider trading or another form of market manipulation. The outcome of those inquiries — and whether criminal charges will follow — remains uncertain as federal agencies review trade records, platform logs and related communications.