Meta description: Kalshi permanently banned George Santos after CFTC said he manipulated State of the Union event contracts tied to his own attendance.

Tags: Kalshi, CFTC, George Santos, State of the Union, Event Contracts

Market platform: Kalshi

Category: Regulation

Kalshi has permanently suspended former Republican Rep. George Santos from direct or indirect access to its exchange and imposed a $71,356 penalty after finding that he violated exchange rules while trading contracts tied to his own attendance at the 2026 State of the Union address. The disciplinary notice took effect Friday, Aug. 28, 2026, and Kalshi announced the action Aug. 31.

The exchange’s notice of settlement of disciplinary action, file number KDA-2026-0006, says its compliance department found reasonable cause to believe Santos traded in markets where the underlying contracts depended on whether he would attend the address. Kalshi said Santos was barred from those trades because he was “a person capable of influencing the outcome of the underlying event.”

The Kalshi action follows a July 31, 2026, Commodity Futures Trading Commission order that settled federal charges against Santos over the same State of the Union contract. The CFTC ordered Santos to disgorge $17,569.98 in trading profits, pay a $17,500 civil monetary penalty and accept a three-year trading ban.

What did Kalshi say Santos did?

Kalshi said Santos placed a series of large trades between Feb. 2 and Feb. 25, 2026, in a market tied to his own State of the Union attendance, then made public statements about whether he would attend. The exchange said some of those statements were false or misleading and were made with intent to move the price of Yes and No contracts.

The notice cites violations of Kalshi Rule 3.6(a), which requires members to cooperate with investigations, and several Rule 5.17 provisions covering market manipulation, material nonpublic information, trading on outcomes a member can influence and deceptive conduct connected to trading activity. Kalshi said Santos profited $17,839.57 in the target markets.

Kalshi imposed a permanent suspension from direct or indirect access to the exchange and a $71,356 penalty. That penalty is about four times the profit amount Kalshi listed in its notice. The exchange’s effective date is Aug. 28, 2026.

Associated Press, citing Kalshi, reported that the Santos sanction was the first permanent ban in the exchange’s history. The same AP report said other political figures received temporary bans and smaller penalties in separate Kalshi disciplinary matters, but Santos was the only person permanently barred.

What did the CFTC order against Santos say?

The CFTC’s July 31 order said Santos engaged in manipulative activity in an event contract “whose underlying event Santos controlled.” The agency said Santos traded a contract titled “Who will attend the State of the Union?” and specifically traded on whether he would attend the 2026 address.

According to the CFTC, Santos traded the contract from Feb. 12 through Feb. 25 while posting on social media about his plans to attend or not attend the State of the Union. The agency said those posts included material misrepresentations and omissions, and that contract prices moved in a direction favorable to Santos’s positions after the posts.

The federal order required Santos to disgorge $17,569.98, pay a $17,500 civil penalty and cease and desist from further violations of the Commodity Exchange Act and CFTC regulations. The total monetary sanction in the CFTC order was $35,069.98.

The CFTC order and Kalshi’s disciplinary notice differ slightly on the profit figure. The CFTC listed $17,569.98 in unlawful trading profits. Kalshi listed $17,839.57 in profit in the target markets. Both documents describe the same core conduct: Santos trading a contract linked to an event he could personally affect.

Why does this matter for prediction markets?

The Santos case puts a concrete enforcement record behind one of the central integrity questions for event-contract exchanges: who may trade when the outcome depends on a person’s own conduct or access to nonpublic information. Kalshi’s rulebook bars members from trading on contracts where they have influence over the underlying event, and the CFTC treated the State of the Union contract as a swap subject to federal anti-manipulation rules.

That distinction matters because Kalshi operates as a CFTC-designated contract market, not as a state-licensed sportsbook. The exchange has been fighting state regulators over whether federally regulated event contracts can be restricted under state gambling laws. Separately, cases like Santos’s show that federal status does not remove the need for account-level market surveillance when contracts turn on political events, speeches, appearances or other actions involving identifiable people.

The CFTC’s language was direct. It said the underlying event was controlled by Santos, and that his trading and social media conduct affected the price of the swap. Kalshi’s notice used the same basic theory under its exchange rules, saying Santos was prohibited from trading because he could influence the outcome.

How did Santos respond?

Santos criticized Kalshi after the lifetime ban was publicized. In a post on X reported by TechCrunch and Covers, he wrote: “Hey @Kalshi thanks for the lifetime ban from your gambling platform. Let’s see how much longer you guys are around for.” Yahoo Finance also reported that Santos called Kalshi an “unserious company” and accused it of violating its own notices and deadlines.

During the State of the Union episode itself, multiple outlets reported that Santos posted on X: “Watching SOTU from an airport tv was not part of the plan! FML.” Kalshi’s notice does not quote that post, but it says his public statements about attendance included false or misleading statements and moved contract prices.

The CFTC settlement did not require a new criminal proceeding. It was an administrative order settling civil regulatory charges under the Commodity Exchange Act and CFTC regulations. The Kalshi notice was a separate exchange disciplinary action under Kalshi’s own rules.

Who is George Santos?

Santos represented New York in the U.S. House in 2023 before the House expelled him in December of that year. In April 2025, the U.S. Attorney’s Office for the Eastern District of New York said Santos was sentenced to 87 months in prison for wire fraud and aggravated identity theft by U.S. District Judge Joanna Seybert.

The Justice Department said Santos pleaded guilty in August 2024 and was ordered to pay $373,749.97 in restitution and $205,002.97 in forfeiture. The Office of the Pardon Attorney lists an Oct. 17, 2025, commutation for George Anthony Devolder Santos, covering the Eastern District of New York sentence for wire fraud and aggravated identity theft.

Those criminal proceedings are separate from the CFTC and Kalshi actions. The prediction-market case concerns Santos’s trading in a 2026 State of the Union event contract and his public statements about whether he would attend.

What happens next?

The immediate record is now split between a federal regulator and the exchange. The CFTC order was issued July 31, 2026, and imposed $35,069.98 in combined disgorgement and civil penalties plus a three-year trading ban. Kalshi’s disciplinary notice became effective Aug. 28, 2026, permanently suspending Santos from direct or indirect exchange access and imposing a $71,356 penalty.

For the prediction-markets industry, the dated documents are the precedent to watch: CFTC Release No. 9276-26 on July 31, 2026, and Kalshi disciplinary file KDA-2026-0006 effective Aug. 28, 2026.