Kalshi flagged the trades, froze the account, and referred the case to federal authorities — the first known criminal-and-civil enforcement track against a named individual on a CFTC-regulated US prediction market.
The Department of Justice and the Commodity Futures Trading Commission have opened insider-trading investigations into former Republican congressman George Santos over trades placed on the prediction-market exchange Kalshi tied to his own February appearance at President Trump’s State of the Union address, NPR reported Tuesday, citing three people with direct knowledge of the trades and two people familiar with Kalshi’s compliance investigation.
Santos allegedly bet “no” on Kalshi’s market for his own State of the Union attendance while publicly posting a video on X the day before the address saying he would be in the gallery, sending the contract’s “yes” odds to a peak of roughly 76 cents — implying a 76% implied probability — before he failed to appear, NPR and the Daily Beast reported.
The three people with knowledge of the trades told NPR Santos cleared profits in the tens of thousands of dollars from the “no” position. Kalshi detected the activity, froze his account, and referred the case to both agencies; neither the CFTC nor the Justice Department returned NPR’s requests for comment, and Kalshi declined to comment.
The probe is the first known federal investigation of a named individual for insider trading on a CFTC-regulated US event-contract exchange, and it lands in the middle of the regulator’s most active enforcement quarter on prediction markets to date. Kalshi, last valued at $22 billion in a $1 billion raise confirmed in May, posted $5.42 billion in April taker volume — the first month it surpassed competitor Polymarket on that metric — and is the only US-domiciled Designated Contract Market currently running political event contracts at scale.
Polymarket, which is based in Panama, holds $515.69 million in protocol total value locked on Polygon, per DefiLlama.
The CFTC’s February Advisory Set the Bar
The CFTC’s Division of Enforcement issued a prediction-markets advisory on February 25, 2026, seven days before the State of the Union, explicitly warning that “misappropriation of confidential information in breach of a pre-existing duty” — the legal frame for insider trading — was prosecutable under Section 6(c)(1) of the Commodity Exchange Act and Regulation 180.1(a)(1) and (3) for event contracts on KalshiEX.
The advisory accompanied two earlier Kalshi disciplinary actions, including a $2,246.36 financial penalty and five-year suspension levied on a 2025 political candidate who bet on his own race, and a $20,397.58 penalty on a YouTube channel editor who traded a market tied to videos he had pre-publication access to.
Santos’s case, if charged, would be the first matter the CFTC takes directly rather than leaving to Kalshi’s internal enforcement. The political-self-betting prohibition is exactly the conduct the February advisory used as its lead example.
Federal Prediction-Market Cases
The Santos probe arrives weeks after the Justice Department charged Google information-security engineer Michele Spagnuolo on May 27 with commodities fraud, wire fraud, and money laundering for allegedly using confidential Google “Year in Search” data to make roughly $1.2 million betting on the platform’s most-searched-person market on Polymarket, the Southern District of New York US Attorney’s Office said. In April, prosecutors charged active-duty US Army Special Forces master sergeant Gannon Ken Van Dyke with making roughly $409,881 on Polymarket markets tied to the US operation that captured Venezuelan leader Nicolás Maduro, according to a DOJ release.
Both prior cases involved Polymarket, which is offshore. The Santos matter is the first to test how federal authorities apply the same statutes on Kalshi — the venue the CFTC directly regulates as a Designated Contract Market.
Santos’s Response
Reached by NPR, Santos said, “Well, that’s news to me,” when asked about the probe, and “I’m not saying yes, I’m not saying no” when asked whether he held a Kalshi account.
He told the broadcaster Kalshi co-founder Luana Lopes Lara is “a fellow Brazilian” he personally knows and said he would call her to verify whether an investigation was underway. A person familiar with Kalshi’s investigation told NPR that Santos does not know Lara, and that Kalshi has tried to interview him as part of its compliance work but he has dodged the requests.
Santos was sworn into Congress in January 2023, expelled that December, and sentenced in 2024 to more than seven years in federal prison on wire-fraud, money-laundering, and donor-theft charges. President Trump commuted his sentence last October after four months served.
