U.S. derivatives regulators said the former New York House representative manipulated Kalshi event contracts tied to whether he would attend President Donald Trump’s 2026 State of the Union address.
Former U.S. Congressman George Santos agreed to pay $35,069.98 and accept a three-year ban from CFTC-regulated prediction markets after the Commodity Futures Trading Commission said he manipulated a Kalshi event contract tied to whether he would attend President Donald Trump’s 2026 State of the Union address. The settlement includes $17,569.98 in disgorgement and a $17,500 civil monetary penalty, and Santos also agreed to cease violating the Commodity Exchange Act. The CFTC said Santos traded both “Yes” and “No” positions on the contract between February 12 and February 25, 2026, while posting conflicting public messages about his travel plans. Because the market’s outcome depended entirely on his own attendance, regulators said he was in a unique position to sway expectations and prices. The agency said his posts and omissions moved the contract in ways that favored his positions, allowing him to make more than $17,500, including more than $14,000 on his “No” position alone. Regulators cited a February 22 X post in which Santos wrote, “Should I wear a muted serious suit to the SOTU or a bedazzled one?” The CFTC said that message increased confidence that he would attend and lifted prices before he reduced part of his position. The agency also said he accumulated more than 23,800 “No” contracts while still publicly suggesting he expected to attend, and did not disclose that his airline and train reservations to Washington had reportedly been canceled before the speech. After settling, Santos criticized Kalshi and argued prediction markets should be regulated as gambling platforms rather than federally regulated derivatives exchanges. The case comes as U.S. prediction markets face broader scrutiny over insider trading, manipulation and compliance with derivatives laws.