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NEW YORK CITY — U.S. federal regulators are investigating whether former congressman George Santos engaged in potential insider trading on prediction markets platform Kalshi, according to a person familiar with the matter.
Kalshi reported Santos to the Department of Justice after detecting suspicious trading activity from his account on the platform, the source said, requesting anonymity as the matter is confidential.
There is an active investigation, according to a source familiar with the investigation.
Santos had publicly posted about attending the State of the Union address around the same time traders were wagering on whether he would appear on the guest list.
His post pushed up the value of the contract trading "no", the source said. After he failed to attend the address, Santos placed bets against his own appearance in the market, the source added.
Kalshi detected the trades and flagged them as potentially suspicious, freezing Santos' account and alerting the Commodity Futures Trading Commission and the DOJ around the end of February, the source said.
The DOJ did not immediately respond to Reuters requests for comment. Santos could not be immediately reached for comment.
Santos, who was expelled from Congress over fraud and identity theft, last year had his more than seven-year prison sentence commuted by U.S. President Donald Trump.
Prediction market platforms Kalshi and Polymarket have faced a rise in suspicious trading activity this year, underscoring growing investor interest in the sector while posing compliance challenges as regulators and law enforcement step up scrutiny.
In March, Democratic lawmakers introduced legislation to ban prediction market bets on military operations and other sensitive government actions following concerns over well-timed trades tied to U.S.-Israeli air strikes in Iran and Venezuela operations.
The New York Times first reported the matter.
