Former congressman George Santos has agreed to pay $35,000 to resolve a federal investigation regarding his trades on the prediction marketplace Kalshi. The investigation was related to his betting activities concerning his plans to attend President Donald Trump’s State of the Union address.
Santos, who previously represented New York as a Republican, settled with the Commodity Futures Trading Commission (CFTC). He emphasized that the settlement did not imply an admission of wrongdoing. According to a statement from his lawyer Joseph Murray, Santos preferred a practical resolution over prolonged litigation.
The CFTC highlighted that the settlement includes repayment of the $17,000 Santos earned from these trades, along with a penalty of $17,500. Additionally, the agency banned Santos from trading for three years.
Kalshi had reported Santos to regulators and aims to reimburse affected traders if the penalty funds are recovered. Santos had publicly discussed his intentions to attend the State of the Union, but ultimately claimed he was unable to due to being stuck at the airport.
Despite high expectations for his attendance, social media users criticized Santos, pointing out that Kalshi had estimated a 75% chance of him being present. Santos addressed these reactions in March, commenting on the unpredictable nature of the markets.
Due to the investigation, another prediction platform, Polymarket, discontinued their association with Santos in June.
Murray defended Santos in his statement, asserting that Santos had genuinely intended to attend the speech, making arrangements before being hindered by a winter storm. He claimed there was no intention to mislead or manipulate the market.
Santos briefly rose to prominence after securing a congressional seat from parts of Queens and Long Island. However, his falsely constructed biography soon collapsed, leading to his expulsion from Congress.
He faced charges including federal wire fraud and identity theft, tied to his campaign financing. Santos ultimately pled guilty and served a short prison term. He was released early following clemency from President Trump.