George Santos, a former Republican congressman from New York, is under investigation for alleged insider trading on the prediction market Kalshi. The New York Times reports that Santos, who was expelled from the House in 2023 and later pardoned by President Donald Trump, is suspected of betting against his own attendance at the State of the Union address last February.
According to CNN, Santos publicly announced that he would attend the address, prompting high-value bets on his attendance. However, he later posted on social media that he was watching the event from an airport, causing the odds to drop. Sources allege that Santos had already placed bets against his attendance, profiting tens of thousands of dollars.
Kalshi identified suspicious activity related to Santos’s account, froze it, and reported the matter to the Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC). Both agencies have opened investigations into the matter. The Washington Examiner notes that Santos has not confirmed or denied having a Kalshi account.
Prediction markets like Kalshi have grown in popularity, allowing bets on various events, including political ones. These markets are regulated by the federal government, but some lawmakers argue that regulations have not kept pace with the industry’s growth. Kalshi and other platforms have committed to reporting suspicious trades to federal regulators.
Santos, who was serving a seven-year sentence for fraud before being pardoned, has not responded to inquiries regarding the investigation. The DOJ and CFTC are continuing their scrutiny of his trading activities.
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