Former U.S. Rep. George Santos is under federal investigation over alleged insider trading on Kalshi, according to an NPR report first cited by the Associated Press. The case centers on contracts tied to whether Santos would attend President Donald Trump’s State of the Union address.
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Kalshi users risked millions on a market tied to who would appear at the State of the Union. Santos became one of the names attached to that market, along with other public figures such as Barron Trump, Erika Kirk, Benjamin Netanyahu and Nicki Minaj.
The issue, according to NPR, came from a gap between what Santos said publicly and what he allegedly traded privately. Santos posted a video on X the day before the event and said:
“I’m going to be there for the State of Union in the gallery,”
Contracts on Santos attending reportedly jumped after that post. Prices later moved as high as $0.76 on the morning of the event. Yet Santos did not attend.
Kalshi froze Santos’ account after detecting suspicious activity, according to reports. The company then referred the matter to the Commodity Futures Trading Commission and the Department of Justice. Both agencies have been looking more closely at insider trading risks in prediction markets, especially when traders can influence or know the outcome of an event before the public does.
Licensed prediction platforms prohibit insider trading and market manipulation. The legal question here is also larger than Santos. Prediction markets such as Kalshi and Polymarket allow users to trade event contracts, while regulators continue to debate where gambling law ends and federally regulated derivatives law begins. For more background, see our prediction markets coverage and US gambling regulation updates.
Santos told NPR that the probes were “news to [him].” He also said he had a personal relationship with Kalshi co-founder Luana Lopes Lara and planned to call her. A source cited by NPR disputed that version and said Santos did not accept an interview from Kalshi during its own review.
Santos later wrote on X:
“I hate to disappoint but I don’t engage with rag reporting anymore”
He added:
“Business as usual on my end haters!”
The former New York Republican already had a long legal record before the Kalshi referral. The House expelled him in 2023 after an ethics report detailed campaign fund misuse and other conduct. The DOJ later said Santos filed fraudulent FEC reports, took campaign donor funds, stole identities, charged credit cards without authorization, obtained unemployment benefits through fraud and lied in House reports.
Santos pleaded guilty in 2024 and received an 87-month sentence in April 2025. Trump later commuted the sentence after Santos served 84 days, according to AP.