Former New York Republican Rep. George Santos on Friday agreed to a $35,000 settlement with the Commodity Futures Trading Commission (CFTC) to resolve an investigation into suspicious trades he made on the prediction marketplace Kalshi.
The settlement requires Santos to forfeit $17,569 in profits and pay a $17,500 civil fine, while also accepting a three-year trading ban. Santos’ legal team stated the agreement was reached to ‘put this matter behind him’ without admitting to any wrongdoing.
CFTC confirms settlement terms
The CFTC confirmed the settlement in a Friday statement, noting Santos’ trades involved bets placed against his own stated plans to attend President Donald Trump’s State of the Union address in February. According to the agency, Santos’ actions violated trading regulations, prompting the enforcement action.
Santos had publicly discussed his intention to attend the event but later claimed he was delayed at the airport and unable to arrive. Kalshi, the prediction platform where the trades occurred, reported Santos to regulators after his absence contradicted market odds that had placed his attendance probability near 75%.
Legal response and market fallout
Santos’ attorney, Joseph Murray, issued a statement emphasizing the settlement’s procedural nature. ‘Mr. Santos has agreed to resolve the CFTC’s inquiry and to put this matter behind him,’ Murray said. ‘Critically, and consistent with how these regulatory matters are commonly resolved, Mr. Santos has settled without admitting any of the Commission’s allegations, findings, or conclusions.’
The settlement follows Santos’ removal from Polymarket, a rival prediction platform, in June after the federal probe came to light. Santos had previously dismissed criticism of the trades during a March podcast, stating, ‘I guess people lost money. Some people made unexpected money. That’s to show you how fragile these markets are.’
Marketplace reaction and regulatory scrutiny
Kalshi, which had flagged Santos’ trading activity to authorities, announced it would pursue its own enforcement action and seek to reimburse affected traders if monetary penalties are recovered. The platform’s decision underscores broader concerns about insider trading risks in prediction markets, which operate with fewer safeguards than traditional financial exchanges.
The CFTC’s enforcement action highlights ongoing scrutiny of predictive trading platforms, which have grown in popularity but remain loosely regulated compared to stock or futures markets. Santos’ case marks one of the first high-profile regulatory interventions in this emerging sector.
Background: Santos’ prior controversies
Santos, who represented New York’s 3rd Congressional District, resigned from Congress in December 2023 amid multiple ethics investigations and allegations of financial misconduct unrelated to the Kalshi trades. His legal and political career has been marked by repeated controversies since his 2022 election victory.
The CFTC settlement does not address the broader investigations into Santos’ conduct while in office, which remain pending. Santos has consistently denied wrongdoing in those cases as well.