Federal authorities are investigating whether the former congressman used privileged information to profit from bets on his own presence at the State of the Union address
Former US Congressman George Santoswho became one of the most controversial characters in recent United States politics, was once again target of investigation. This time, the focus is not on his performance in Congress, but on operations carried out on a prediction markets platform known as Kalshi.
According to sources heard by an American TV network, federal authorities are investigating whether Santos would have used privileged information to profit from bets related to his own participation in a political event of great national repercussion: the State of the Union speech, held in February this year.
The suspicion arose after the Kalshi platform identified movements considered unusual in a market that allowed users to bet on whether or not George Santos would attend the traditional presidential speech before Congress.
What caught the attention of researchers
The prediction market handled millions of dollars in bets. Participants could buy contracts betting on the presence or absence of the former congressman at the event.
According to the sources, Santos had publicly announced that he would attend the session. However, it ended up not appearing.
The central question of the investigation is that an account identified by Kalshi as belonging to Santos himself had carried out operations related to market results.
As only he would know in advance whether or not he would actually attend, authorities are analyzing whether information not available to the public was used to get financial advantage.
After detecting suspicious activity, Kalshi froze the account and referred the case to the United States Department of Justice.
Who is investigating
In addition to Department of Justicea Commodity Futures Trading Commissionknown by the acronym CFTC, also opened an investigation.
The CFTC is the federal agency responsible for overseeing derivatives markets and financial contractsincluding so-called prediction markets, which have been growing rapidly in the United States.
These platforms work similarly to stock exchanges, but instead of stocks, participants trade probabilities about future events, such as elections, economic indicators, court decisions and sporting events.
What is Kalshi
Founded in 2018, Kalshi became the first federally regulated prediction markets platform. In recent years, the company has gained notoriety for allow bets on political topics, economic e social.
During the 2024 presidential election, for example, billions of dollars were moved into contracts related to the outcome of the dispute between Donald Trump and his opponents.
The accelerated growth of the sector has also brought regulatory concernsespecially in cases involving people who may have privileged access to information capable of directly influencing the negotiated results.
Who is George Santos
George Santos was elected federal deputy for New York in 2022 and quickly became one of the most controversial figures in the American Congress.
Shortly after taking office, reports revealed that he had invented or exaggerated significant parts of his biography.
Among the false allegations were university degrees, professional experience in large financial institutions and even details about his personal background.
The sequence of scandals led to the opening of several investigations.
In December 2023, Santos was expelled from the House of Representatives, becoming only the sixth congressman in United States history to suffer this punishment.
He later faced federal charges involving wire fraud, money laundering, falsifying documents and embezzlement of campaign funds.
Possible consequences
To date, George Santos has not been formally charged in the case involving Kalshi.
The investigations are at an early stage and seek to determine whether there was, in fact, improper use of privileged information or market manipulation.
If the suspicions are confirmed, Santos could face new federal charges, expanding the already extensive list of legal problems that have accompanied him since his departure from politics.
The case could also become an important test for US regulators as they seek to draw the line between legitimate bets on prediction markets and potential fraud practices involving proprietary information.
*This text does not necessarily reflect the opinion of Jovem Pan.
