George Santos paid $35,000 to settle with U.S. regulators over prediction market trades where he bet on whether he would attend President Trump's State of the Union address. The CFTC found he made misleading public statements while placing the bets, then switched positions when his travel plans fell through.
Santos opened his Kalshi account in mid-February with about $7,000. He immediately started buying "Yes" contracts on his attendance, accumulating nearly 31,000 of them by late February for under $6,700. Then he posted on X asking followers whether to wear a serious or bedazzled suit to the event. The market price for "Yes" jumped from $0.15 to $0.70 after the post. Santos dumped his entire position, pocketing $3,448 in profit and withdrawing over $10,000 through a freshly created Venmo account.
Hours later his airline canceled his flight to Washington. Suddenly the strategy reversed. Santos began buying "No" contracts, betting he wouldn't make the event. When he ultimately skipped the address, those bets paid off. The CFTC concluded he'd deliberately misled the market about his intentions to move prices in his favor, then switched sides once circumstances changed.
Kalshi's surveillance system flagged the suspicious activity and referred Santos to authorities. The platform froze his account. According to the July 31 CFTC order, Santos must return $17,569.98 in gains, pay a $17,500 civil penalty, sign a cease-and-desist order, and stay banned from trading on any CFTC-registered platform for three years. Santos neither admitted nor denied the agency's findings.
This material is for informational purposes and does not constitute financial advice or investment recommendations.
