Kalshi, a marketplace for predictions, identified unusual trades by Santos prior to Trump’s State of the Union address, a source revealed to the Associated Press.
NEW YORK — U.S. Representative George Santos is under scrutiny after a prediction market flagged him to federal prosecutors. The report came after Santos claimed he would attend President Donald Trump’s State of the Union address, then placed bets against his own attendance, according to a source familiar with the situation.
The online platform Kalshi referred Santos to the Department of Justice after noticing questionable trading activity by the former congressman before Trump’s speech on February 24. This source shared details with the Associated Press anonymously, as they were not authorized to speak on the matter publicly.
In addition to alerting the Justice Department, Kalshi reported the suspicious trades to the Commodity Futures Trading Commission (CFTC), a federal body committed to curbing insider trading within prediction markets.
As of Tuesday, the Justice Department and the CFTC have not provided comments in response to the Associated Press’s inquiries.
Santos has also been unresponsive to attempts for comment via text messages and phone calls.
The referral was first reported by NPR. Santos told NPR that he wasn’t aware of the investigation. He declined to say whether he had a Kalshi account.
“I’m not saying yes, I’m not saying no,” Santos told NPR.
The convicted ex-congressman had repeatedly discussed his intention to attend the State of the Union, which came just four months after he was granted clemency by Trump in a fraud case that led to his expulsion from the U.S. House.
On the eve of Trump’s speech, Kalshi put the odds of Santos attending at close to 75%.
Then, minutes into the speech, Santos posted on X that he had been waylaid at the airport. Immediately, several social media users accused him of running another scheme.
“Santos talking to his accountant and telling him to open his Kalshi account and bet all his money on No,” one user wrote, alongside a meme of Al Pacino counting money in the movie Scarface.
In March, Santos addressed the complaints on his podcast.
“I guess people lost money,” he said. “Some people made unexpected money. That’s to show you how fragile these markets are.”
Santos, who won office as a Republican after inventing a bogus persona as a Wall Street dealmaker, was sentenced to seven years in prison after pleading guilty to fraud and identity theft in 2024.
After serving just 84 days, he was ordered released by Trump, who called Santos a “rogue” but said he didn’t deserve a harsh sentence and should get credit for voting Republican.
Prediction markets, including Kalshi and its chief rival Polymarket, have drawn scrutiny as their businesses have expanded — with some lawmakers urging the platforms to do more to guard against insider trading.
Both companies have said they are reporting suspicious trades to federal regulators. Some investigations have led to criminal charges. In April a soldier involved in the military operation to capture Venezuelan President Nicolás Maduro was charged with using classified information to win more than $400,000 predicting the date of his capture on Polymarket.
In April, the Senate approved a bipartisan resolution to prevent its own members from using prediction markets.
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