Kalshi has announced five new disciplinary measures against traders who allegedly breached the rules of the prediction market exchange. Among those affected is former U.S. Representative George Santos, who faces a permanent ban due to claims of market manipulation, alongside three political candidates who traded contracts linked to their own electoral campaigns.
The penalties imposed by Kalshi range significantly, with fines between $2,589.96 and $71,356. Four traders received suspensions lasting from one to three years, while Santos was permanently barred from trading.
This wave of enforcement actions adds to the ongoing scrutiny of prediction market trading. Recently, the Commodity Futures Trading Commission (CFTC) required a former White House employee to pay around $172,000 for trades made using confidential information, and further legal actions are reportedly in the pipeline.
Three candidates were found to have traded on their own elections: California gubernatorial candidate Stephen Cloobeck, North Carolina congressional candidate Laurie Buckhout, and Maine gubernatorial candidate Ben Midgley. Kalshi determined that their candidacies gave them direct influence over the events tied to the contracts, thus prohibiting their trading activities.
Cloobeck received the heftiest penalty, totaling $31,770 and a three-year suspension, after purchasing approximately $10,000 worth of contracts related to his 2026 gubernatorial run. Buckhout and Midgley faced lesser penalties of $2,589.96 and $5,434.30, respectively, with both candidates also suspended for three years.
All candidates cooperated with Kalshi's investigations and opted to resolve their cases amicably.
The most severe action was directed at Santos, who was accused of manipulating contracts linked to his potential attendance at President Donald Trump’s State of the Union address. Kalshi discovered that Santos executed large trades prior to publicly announcing his attendance, with some of his statements deemed misleading and intended to influence contract prices. He reportedly gained $17,839.57 in profits from these transactions, leading to his permanent suspension and a fine of $71,356, which is distinct from a previous CFTC settlement.
In another case, trader Eric Park faced penalties for improperly accessing another user’s account and conducting prohibited trades. He was required to return $14,472.65 and pay an additional $7,342 fine, alongside a one-year suspension, which has already been served. Park cooperated with the investigation and settled the case without admitting any wrongdoing.
Additionally, these disciplinary actions follow a separate settlement involving Gabriel Perez, a former White House teleprompter operator, who was found to have traded on nonpublic information regarding President Trump’s speeches. Perez was suspended for three years and agreed to return $107,539.02, pay a $65,000 civil penalty, and accept the trading ban.