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Former US congressman George Santos has been permanently banned from trading on prediction market platform Kalshi after the company concluded that he engaged in activity resembling insider trading.
Kalshi said its compliance team investigated Santos after identifying suspicious bets connected to his attendance at President Donald Trump's State of the Union address. The platform said Santos placed several sizeable bets between February 2 and February 25, with some of his public statements allegedly influencing contract prices.
According to Kalshi, Santos ultimately earned $17,839.57 from the trades. The company said the case was referred to federal authorities earlier this summer after its internal monitoring systems detected unusual activity.
The decision comes amid growing scrutiny of prediction markets, which allow users to trade contracts based on the outcomes of events ranging from political developments to economic indicators.
Kalshi said Santos' trades were particularly concerning because they involved an event over which he could potentially influence his own participation. The company said its investigation concluded that the activity warranted a lifetime ban, without waiting for outside regulators to take action.
Santos responded to the decision on X by thanking Kalshi for banning him and questioning how long the company would continue operating.
The disciplinary action follows a separate federal investigation. In July, Santos agreed to pay $35,000 to settle an investigation by the Commodity Futures Trading Commission involving the same State of the Union trades. Kalshi also imposed a penalty of $71,356.
Santos has faced extensive legal and political controversy in recent years. He was expelled from the US House of Representatives after allegations surrounding his personal and financial history, becoming only the sixth member in American history to be expelled from Congress.
He later pleaded guilty to wire fraud and aggravated identity theft and admitted stealing the identities of nearly a dozen people. He was sentenced to seven years in prison but served three months after Trump commuted his sentence.
Santos became nationally known after winning election to Congress in 2022, although numerous claims he had made about his background and career were subsequently found to be false or misleading.
The Kalshi controversy adds another chapter to his already unusual public career while highlighting the increasingly complex regulatory environment surrounding prediction markets.
As platforms such as Kalshi and Polymarket attract larger audiences, their ability to detect and prevent improper trading is receiving greater attention. Both companies have reported unusual trading patterns and increased their monitoring efforts.
Santos' lifetime ban demonstrates the seriousness with which prediction platforms are beginning to treat potential conflicts of interest, particularly when users possess information that ordinary traders may not have.
