Kalshi issues first lifetime ban to former U.S. Rep. George Santos

Former U.S. Representative George Santos has become the first person to receive a lifetime ban from prediction market platform Kalshi after the company said he engaged in allegedly manipulative trades that earned him about $18,000 by betting on his own appearance at President Donald Trump’s State of the Union speech.

The action against Santos comes amid a broader industry push to address abuse on trading platforms, including a regulator’s action against a former White House employee and a reported effort by Polymarket to curb bad actors in midterm election betting.

According to Kalshi’s disciplinary record posted on its website, Santos “placed a series of large trades in a market where the underlying contracts depended upon his own attendance at the event.” The company added that he then made a series of public statements about whether he would attend Trump’s speech in an attempt to influence the price of Yes and No contracts. “Some of these included false or misleading statements,” Kalshi said.

Santos ultimately did not attend the speech, which was the outcome he had wagered on. In addition to the lifetime ban, Kalshi fined him more than $70,000 in an action taken late last week. Federal authorities have reportedly been looking into the matter. Santos did not immediately respond to CoinDesk’s request for comment.

Santos was expelled from Congress in 2023 amid criminal investigations. He later served prison time for fraud before Trump commuted the sentence last year.

Kalshi said Santos was one of five new enforcement cases at the company. The firm said it is required under its regulations to act as a first line of defense against manipulation, and said the other cases resulted in temporary bans after the users cooperated with investigations. That distinction underscores how prediction markets are trying to police conduct in a sector that depends on trust that traders are not using inside information, false statements, or personal involvement to shape contract prices.

“Mr. Santos faces additional financial penalties and will be banned permanently from trading on Kalshi given his lack of cooperation,” a spokesperson said in a statement.

The U.S. Commodity Futures Trading Commission, which regulates the industry, also fined former White House aide Gabriel Perez for illicit trading late on Friday. Perez was ordered to pay more than $170,000 and received a three-year trading ban. His penalties were reduced after what the CFTC described as his “exemplary cooperation.”