Kalshi permanently banned former Congressman Santos for his involvement in trading based on the State of the Union address

According to The Block, the prediction market platform Kalshi has permanently banned former U.S. Congressman George Santos, marking the first time the platform has imposed a permanent ban on an individual. According to a disciplinary action and settlement notice submitted on Monday, Santos violated platform rules by trading on a prediction contract regarding whether he would attend the State of the Union (SOTU) address and was fined over $71,000.

Previously, the Commodity Futures Trading Commission (CFTC) accused Santos of using his public statements made two weeks before the SOTU to influence the prices of related event contracts and reached a $35,000 settlement with him. Santos's lawyer stated that he had booked a hotel and flight to Washington, believing he would attend the event. Santos served as a congressman representing New York from January 2023 until the end of the year, when he was expelled for ethical violations.

As the prediction market grows to billions of dollars, concerns about insider trading are increasingly being raised. The CFTC recently fined former White House teleprompter operator Gabriel Perez $172,000 for profiting in Kalshi's "mention market" by using advance access to Trump's speech content. Legislators have proposed several bipartisan bills to restrict trading on non-public information, but they have not yet passed; platforms like Kalshi and Polymarket are taking preventive measures, such as requiring employment verification for sensitive market traders.