Additional Coverage:
Former New York Congressman George Santos, who was convicted on federal fraud charges and sentenced to prison last year, is now facing federal scrutiny over his activities on prediction markets, according to multiple sources familiar with the investigation.
The prediction trading platform Kalshi flagged unusual trading patterns related to a market centered on whether Santos would attend President Donald Trump’s State of the Union address this year. This market also featured bets on other notable figures expected at the event, including Trump’s son Barron, hockey star Jack Hughes, and MAGA journalist Nick Shirley.
Although Santos publicly stated he would attend the speech, he ultimately did not appear. Kalshi traced the suspicious account activity back to Santos, subsequently freezing the account and referring the case to both the Justice Department and the Commodity Futures Trading Commission (CFTC), which oversees prediction markets. The CFTC has confirmed it is investigating the matter.
Federal officials are reportedly examining potential insider trading concerns arising from Santos’s trades on the platform. Santos has denied knowledge of any insider trading probes. The Justice Department has also been contacted for comment.
Santos was serving a seven-year prison sentence on charges including aggravated identity theft and wire fraud connected to his 2022 campaign before former President Trump commuted his sentence, resulting in Santos serving less than three months behind bars.
Prediction markets like Kalshi have gained significant traction recently, enabling participants to place bets on a wide range of events, from elections to sports and entertainment outcomes. While these markets are regulated as commodity futures, some lawmakers argue existing regulations have not kept pace with the rapid growth of the industry.
CNN, which collaborates with Kalshi for event coverage, prohibits its editorial staff from engaging in trading on prediction platforms to avoid conflicts of interest. Both Kalshi and Santos have not commented on the ongoing investigation.