George Santos Banned from Kalshi After Market Manipulation Scheme

Kalshi’s disciplinary action, effective August 28, found that Santos repeatedly violated exchange rules by trading contracts where he held direct control over the outcome. Throughout February, the former congressman leveraged his social media presence to sway contract prices. By posting misleading updates about his travel plans and attendance status, he successfully triggered price swings, allowing him to flip between "Yes" and "No" positions for personal gain. The exchange noted that Santos failed to cooperate fully during its internal probe, leading to a penalty set at four times his total profit.

This outcome follows a separate July 31 order from the Commodity Futures Trading Commission, which imposed a three-year trading ban and additional financial sanctions. While federal regulators acknowledged Santos's cooperation in their specific inquiry, the CFTC classified the event contracts as swaps, subjecting them to strict anti-manipulation laws. These combined actions underscore a broader regulatory crackdown on prediction markets, where platforms are increasingly implementing internal monitoring and whistleblower channels to combat insider trading and deceptive schemes involving high-profile users.