Kalshi caught the activity, suspended his account, and referred the case to the Commodity Futures Trading Commission and the Department of Justice, two people familiar with the exchange's review told the outlet.
Santos pocketed tens of thousands of dollars by deceiving bettors about his February plans, according to NPR, which cited three people with direct knowledge of the trades who were not authorized to speak publicly.
The report comes amid rising scrutiny of prediction markets across the country, with insider trading concerns already leading to criminal charges and calls for tougher oversight.
Watching SOTU from an airport tv was not part of the plan! FML 🤬
Asked about the probe, Santos told NPR, "Well, that's news to me," and declined to confirm or deny having a Kalshi account, saying, "I'm not saying yes, I'm not saying no."
George Santos, the CFTC, the DOJ, and Kalshi did not respond immediately to Decrypt's requests for comment.
Enforcement pushThe allegations against Santos may not fit neatly into traditional insider trading law, Yuriy Brisov, partner at Digital & Analogue Partners, told Decrypt.
Unlike recent prosecutions, Santos allegedly "misappropriated nothing," Brisov said, adding instead that the case appears "closer to manipulation: move a price with a false signal, then trade against it."
"Trading on your own conduct is a category that the inherited rulebook never anticipated," Brisov said, noting how existing securities and commodities laws were built around the misuse of confidential information, not wagers tied to a person's own actions.
"The lesson here is not that prediction markets are lawless," Brisov added. "It is that the platforms are the fastest regulators in the room."
Crypto pitchesThe former lawmaker has crossed paths with crypto before.
