Former U.S. Representative George Santos settled claims with the Commodity Futures Trading Commission (CFTC) alleging he manipulated a Kalshi event futures contract by making misleading public statements while trading on the topic of his attendance at President Donald Trump's State of the Union address. According to a July 31 order, Santos must disgorge $17,569.98, pay a $17,500 civil penalty, accept an injunction against further wrongdoing, and refrain from trading on any CFTC-registered exchange for three years.
Santos was expelled from Congress in December 2023 and pleaded guilty to aggravated electronic fraud and identity theft, for which he was sentenced to more than seven years in prison. He served approximately four months before Trump commuted his sentence in October 2025, releasing him without additional fines, restitution, or parole. Four months later, he opened a trading account.
This order concludes the CFTC's investigation into Santos publicly promoting plans to attend the event, after which he opened a profitable position betting on his non-attendance. The commission's trading records now reveal a fuller picture: Santos first made money by betting he would attend, then reversed course and bet he would not.
Kalshi listed the market on his attendance about three weeks before he opened his account on February 11. He funded it with roughly $7,000 and traded exclusively in this contract. Between February 12 and 22, he accumulated 30,874 "Yes" contracts worth $6,695.94. After he asked his X followers whether he should wear a serious suit or a sparkly suit to the event, the price of "Yes" contracts rose from $0.15 to $0.70. Santos then sold his entire position for a profit of $3,448.43 and withdrew $10,146.07 via a newly created Venmo account.
Later that same day, an airline notified him that his flight to Washington was canceled. That evening, Santos purchased a train ticket and continued to publicly discuss the trip. On February 23, he posted a video stating he would be in the House visitors' gallery, causing the "Yes" contract price to surge again from $0.40 to $0.70. Roughly 40 minutes later, he began buying contracts that would pay out if he failed to attend the event.
In the end, Santos accumulated 23,855 "No" contracts worth $8,650.66. His train was canceled about an hour after he began building this position, but when another X user asked if he was dropping out of attending, Santos replied that he was not. Both his flight and his train had been canceled by that point, which the CFTC says he did not disclose publicly.
On the day of the speech, internet records showed Santos logging into Kalshi from his home address. He later posted that watching the speech on TV at the airport was not his plan. The "Yes" contract price plummeted from $0.73 to $0.02, increasing the value of his "No" position, which he closed early on February 25, reportedly for a profit of $14,390.57.
The commission found that Santos made misleading statements and committed material omissions with the intent to affect the contract's price to his benefit. The commission characterized this behavior under the Commodity Exchange Act's anti-manipulation provisions and Rule 180.1, rather than treating it as conventional insider trading based on wrongfully obtained confidential information—the approach federal prosecutors used against Army Staff Sgt. Gannon Ken Van Dyke, who turned $33,000 into over $404,000 on the Polymarket platform ahead of a raid on Maduro's company. The order also classified the State of the Union attendance contract as a swap subject to CFTC jurisdiction.
Santos accepted the settlement terms without admitting the findings or conclusions in the order. His attorney, Joseph W. Murray, stated that the former lawmaker originally intended to attend the event but changed his position after winter weather conditions disrupted his travel; he denied any intent to mislead traders or manipulate the market and noted that Santos "chose a quick and practical resolution over a protracted and costly court battle."
Kalshi stated it detected the activity, froze the account, and provided evidence used by the CFTC. CEO Tarek Mansour told Axios last month that Santos "attempted to manipulate one of the markets, and within seconds it was flagged by our system," adding that "within minutes we received about a hundred whistleblower complaints." The exchange plans to take separate action for rule violations and said it may compensate affected traders for losses if funds can be recovered from Santos, aligning with an oversight approach developed through its partnership with Sportradar for integrity and transparency.
In June, NPR reported that Kalshi referred information about the incident to both the CFTC and the Department of Justice, and that both agencies opened investigations. However, on June 3, a DOJ spokesperson told the Washington Examiner that no such case exists, and the department has continued to deny its existence since. Thus, the settlement with the CFTC remains the only confirmed federal action related to these trades.
