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Kalshi

George Santos Gets Kalshi’s First Permanent Ban Over Insider Trading

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George Santos has become the first person to be permanently barred from the prediction market Kalshi, which said Monday that it had also imposed a $71,356 penalty on the former New York congressman after determining that he engaged in insider trading.

The disciplinary action adds to growing scrutiny surrounding prediction markets, which have surged in popularity over the past year as users wager billions of dollars on the outcomes of political races, entertainment events and other real-world developments. Kalshi, for example, offers markets ranging from election results to questions about who will marry on “Love Is Blind.”

That rapid growth has also raised new questions about how prediction markets should be regulated, whether some offerings run afoul of state gambling laws, and how platforms can prevent people with access to nonpublic information—or control over an outcome themselves—from trading on it.

In April, three political candidates were found trying to place bets on their own races. And last week, the Commodity Futures Trading Commission, which regulates prediction markets at the federal level, fined a White House teleprompter operator $172,000 for betting on what President Trump would say during his speeches.

Another case announced Monday involved Laurie Buckhout, the Republican nominee in North Carolina’s closely watched 1st Congressional District, who acknowledged betting on her own campaign. Buckhout said she had made a “dumb mistake” and cooperated with Kalshi’s investigation. The company said she traded less than $1,000 and suspended her from the platform for three years.

The case marked the first publicly known instance of a current congressional nominee being caught wagering on their own race. Buckhout, a retired Army colonel endorsed by Trump, is challenging Democratic Rep. Don Davis in a district considered one of the GOP’s stronger opportunities to pick up a House seat in the midterm elections. She lost to Davis by fewer than 2 percentage points in 2024 before Republican state lawmakers redrew the district.

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Santos had already faced federal penalties for his own trading before Kalshi announced its punishment. Last month, the Commodity Futures Trading Commission ordered him to pay roughly $35,000, including a $17,500 civil penalty and more than $17,500 in surrendered profits, over wagers tied to whether he would attend Trump’s State of the Union address in February. The agency concluded that Santos had engaged in manipulative trading in a market whose underlying outcome he could personally influence. The settlement also imposed a three-year trading ban and brought the CFTC’s investigation into the trades to a close.

In the days before the address, Santos publicly indicated that he intended to be there.

“I’m gonna be in the gallery,” Santos said in a video he posted on X.

Behind the scenes, however, Santos was also trading on the possibility that he would not attend. Around the time of the State of the Union, Kalshi detected that he had placed wagers against his own attendance, The New York Times previously reported.

Santos ultimately did not appear at the speech.

Kalshi subsequently referred the matter to both the Justice Department and the Commodity Futures Trading Commission. The CFTC later found that Santos had engaged in manipulative activity “designed to affect the price of the swap.”

The federal regulator said Santos traded contracts concerning his attendance between Feb. 12 and Feb. 25 while also posting publicly about whether he planned to go. According to the agency, those statements moved prices in directions that benefited his positions, allowing him to earn more than $17,500 from the trades.

Kalshi also pursued its own investigation and eventually reached a similar conclusion about his conduct.

“The Kalshi compliance department has established reasonable cause to believe that George Santos engaged in trading activity in certain markets related to his attendance at the State of the Union address.”

The platform announced disciplinary actions against several other people on Monday related to insider trading. Those cases resulted in temporary three-year bans, according to an emailed statement from the company.

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Santos received the far more severe punishment of a permanent ban because, Kalshi said, he was the only person among those disciplined who did not cooperate with its investigation.

Santos declined to comment when asked about the company’s findings.

He nevertheless responded publicly to Kalshi after news of the punishment emerged.

“Hey @Kalshi thanks for the lifetime ban from your gambling platform. Let’s see how much longer you guys are around for.”

The remark came as Kalshi and other prediction-market companies face an ongoing legal fight over whether their products should remain federally regulated as financial markets or fall under state gambling laws.

Santos also accused Kalshi of failing to abide by what he described as a 30-day notice period, saying the company had given him that notice on Aug. 7 before permanently barring him from trading.

It was not his first public attack on the company. Santos had previously denied wrongdoing in connection with his trades, calling the allegations “preposterous,” and later described Kalshi as “a predatory app” on social media.

The episode represents another legal and ethical controversy for Santos, whose brief congressional career unraveled amid revelations about false claims he had made about his personal and professional history.

Santos was charged with fraud in 2023 after The New York Times and other news organizations reported that he had extensively fabricated parts of his biography. Later that year, the House voted to expel him, making him one of only a small number of members in American history to be removed by their colleagues.

He was subsequently sentenced to seven years in federal prison. Santos served only a portion of that sentence before Trump commuted it last fall, leading to his release.

Polymarket Trader’s Near-Perfect Iran Bets Draw Scrutiny

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A trader on the prediction market platform Polymarket has drawn scrutiny after racking up nearly $1 million in profits since 2024 by consistently betting on geopolitical events, often just hours before they unfolded.

An analysis shared with CNN by blockchain analytics firm Bubblemaps found the bettor correctly predicted a series of U.S. and Israeli military actions involving Iran, including strikes in October 2024, U.S. airstrikes on Iranian nuclear facilities in June 2025, and a joint U.S.-Israeli operation earlier this year. In many cases, the wagers were placed shortly before the operations were publicly known.

The trader’s success rate was unusually high. According to the analysis, they won 83% of their bets overall and 93% of wagers exceeding $10,000, netting approximately $967,000. Such performance has raised concerns among experts about whether non-public information may have played a role.

“It sure seems like this person either has incredible luck or was insider trading,” said Todd Phillips, a finance professor at Georgia State University and former advisor to the Commodity Futures Trading Commission (CFTC). “Having win rates in the 80% to 90% range is just too good to be true. I look at this, and I think something fishy is going on.”

Bubblemaps CEO Nick Vaiman echoed that skepticism, pointing to the trader’s timing and consistency.

“All of this is strong signaling of insider activity, based on the amount they made, the markets they bet on, the timing of their trades, the success rates of these trades, and the fact that they are connected on-chain. This is pretty suspicious in my book.”

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Still, there is no definitive evidence that the trader had insider access. The accounts involved are anonymous and cannot be directly linked to any individual. Some of the bets were also placed days or weeks in advance, which experts say is less suggestive of insider knowledge.

The activity highlights broader concerns about prediction markets, where users can wager on outcomes ranging from elections to armed conflicts. While such platforms have gained popularity, they have also sparked debate over whether they can be exploited by those with privileged information.

Although the CFTC approved the company to offer services to U.S. users last year, its domestic platform is not yet fully operational. Experts note that Americans can still access the offshore site using VPNs.

That approval followed the Trump administration’s decision to close a Biden-era investigation into whether Polymarket had improperly allowed U.S. users on its offshore platform.

Amid rising scrutiny, Polymarket announced new rules this week to clarify what constitutes prohibited insider trading. The updated policy bans trades based on confidential information, tips from individuals obligated to keep information private, and participation by those in positions of authority who could influence event outcomes.

“These rule enhancements make our expectations abundantly clear for every participant across both platforms and highlight the compliance infrastructure we have already built.”

Other platforms are taking similar steps. Kalshi, a U.S.-regulated prediction market, introduced additional safeguards, including enhanced screening for athletes and politicians. The company, which also prohibits insider trading, operates fully within U.S. regulatory oversight.

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The issue has gained urgency as geopolitical tensions, particularly involving Iran, have driven increased betting activity. Lawmakers and watchdog groups have raised alarms about so-called “death markets,” where users speculate on events such as the fate of political leaders.

There have already been legal consequences abroad. Israeli authorities recently indicted two individuals, including a military reservist, for allegedly using classified information to place bets on Polymarket during last year’s conflict with Iran.

The situation has prompted bipartisan efforts in Washington to tighten regulations. Proposed legislation would bar federal officials from using non-public information to trade on prediction platforms. Meanwhile, the CFTC has issued guidance reminding operators that insider trading is illegal and subject to enforcement.

Still, defining insider trading in these markets remains complex. In the U.S., the legal standard typically requires that the trader has a duty to keep certain information confidential.

Jason Trost, CEO of the UK-based prediction platform Smarkets, noted that not all informational advantages qualify as insider activity. Some data—such as satellite imagery or overheard conversations—may be difficult to obtain but not legally restricted.

“The more of that information that gets into the marketplace, all the better,” Trost said. “But if there’s something you know about that is about to happen, and it is materially non-public information, then that, I think, is the red line.”

Even so, the pattern of highly accurate, well-timed bets has fueled ongoing concern. Analysts say similar activity has appeared around other major geopolitical developments, suggesting this may not be an isolated case but part of a broader trend shaping the future of prediction markets.