Kalshi says the Commodity Futures Trading Commission has not contacted the company and it does not believe a formal examination is underway, after reports that regulators were reviewing nearly one million similarly sized trades on its ether perpetual market. The company attributes the pattern to its liquidity incentive program rather than wash trading.
Kalshi is pushing back against reports of regulatory scrutiny over trading activity on its platform. The prediction-market-turned-crypto-exchange says it has not been contacted by the CFTC and does not believe a formal examination has been opened.
What drew the scrutiny
CoinDesk had reported that a majority of trading volume on Kalshi's bitcoin and ether perpetual markets was made up of identically sized trades, with many ether perpetual trades clustered around $5,500 and bitcoin perpetual trades around $2,500 or $5,000. The Wall Street Journal then reported that the CFTC was examining the activity after nearly one million trades in an ether market were placed in similar amounts, before deciding whether to open an enforcement investigation. The CFTC declined to confirm whether an investigation was underway and had not returned a request for comment.
The trades accumulated over $5 billion in volume within a single month. The volume-to-open-interest ratio in Kalshi's ether perpetual market reached as high as 174x. Beni, a co-founder of research firm Stealth Neolab, said Kalshi's ether perpetual recorded about $539 million in 24-hour volume against just $3.1 million in open interest, and that trades of exactly $5,500 made up 48% to 58% of notional volume on four days in September.
Kalshi's defense
Spokesperson Elisabeth Diana said the patterns are typical of the exchange's liquidity incentive program, which rewards participants for providing liquidity, rather than a sign of wash trading. She also disputed speculation circulating on social media about the exchange. According to CoinDesk: "Don't believe everything you read on X," Diana said, adding that a lot of the discourse was rumors seeded by competitors. She added that Kalshi sends its data to the CFTC every day, so a review of that data is not unusual.
Diana said Kalshi has tools and a surveillance team in place to guard against wash trading and self-trading, and the company argues its systems block self-trades and actively monitor for coordinated activity. Kalshi also pointed to its record of cooperating with regulators, saying it has referred dozens of insider-trading cases to the CFTC and enforced penalties in past incidents, including cases tied to its political prediction contracts in 2025.
Regulatory backdrop
Kalshi built its business as a CFTC-regulated prediction market before expanding into crypto perpetual futures, a pivot into a larger and more competitive market. The CFTC had initially tried to block Kalshi's political event contracts, but a federal court ruled in the company's favor. No formal enforcement action has been announced, and the CFTC has not publicly confirmed or denied an examination of Kalshi's trading activity.
Sources: CoinDesk, Crypto Briefing
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