Hassan Maishera
TL;DR
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Kalshi says the CFTC has not contacted it and that it does not believe it is under formal investigation.
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Reports identified large numbers of identically sized trades in Kalshi’s bitcoin and ether perpetual markets.
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One researcher found that $5,500 ether trades represented 48% to 58% of notional volume on four days in September.
Kalshi has denied that it is the subject of a formal Commodity Futures Trading Commission investigation after reports raised questions about repetitive trading activity in its bitcoin and ether perpetual markets.
A Kalshi spokesperson said the regulator has not contacted the company about an examination. The exchange maintains that the unusual-looking transactions are consistent with its liquidity incentive program and are common in financial markets.
The denial follows reports showing that a large portion of Kalshi’s crypto perpetual volume consisted of trades in identical dollar amounts. The CFTC had not publicly confirmed whether it was reviewing the activity.
Reports Flag Repeatedly Sized Bitcoin and Ether Trades
Several reports emerged that that most trading volume in certain Kalshi bitcoin and ether perpetual markets came from identically sized transactions.
Many ether perpetual trades were clustered around $5,500, while bitcoin perpetual transactions frequently appeared in amounts of approximately $2,500 or $5,000.
The Wall Street Journal subsequently reported similar findings. According to the reports, the CFTC was examining Kalshi’s trading data after nearly one million trades in an ether market were executed in similar amounts.
The regulator was reportedly reviewing the information before deciding whether to open an enforcement investigation. A preliminary review of market data would not necessarily mean the agency had begun a formal probe or found evidence of misconduct.
Kalshi spokesperson Elisabeth Diana disputed suggestions that the company was facing such an investigation.
“We have not been contacted by the CFTC and don’t believe there is any formal examination,” she said. “As we’ve said, these data patterns are typical of liquidity incentive programs and common in financial markets.”
The CFTC did not respond to a request for comment submitted Tuesday, leaving the status of any regulatory review unconfirmed.
Ether Volume Reached $539 Million Against $3.1 Million in Open Interest
The trading pattern had already attracted attention from Beni, a co-founder of research firm Stealth Neolab.
Using information from Kalshi’s public application programming interface, Beni found that the platform’s ether perpetual market generated approximately $539 million in 24-hour trading volume while holding only $3.1 million in open interest.
Trading volume measures the value of contracts exchanged during a period, while open interest tracks positions that remain outstanding. A market can produce high volume relative to open interest if participants repeatedly enter and exit positions.
The difference between the two figures does not by itself prove improper activity. However, the scale of the gap, combined with the frequency of identically sized trades, prompted questions about the source and economic purpose of the transactions.
Beni later reported that trades worth exactly $5,500 accounted for between 48% and 58% of total notional volume on four separate days in September.
Those findings do not establish whether the trades came from independent participants, automated market-making systems, or accounts connected to one another. Answering that question would require information beyond what is visible through a public market-data feed.
Kalshi Points to Liquidity Incentives
Kalshi says its liquidity incentive program explains the concentration of transactions in repeated amounts.
Such programs reward participants for placing orders and helping maintain active markets. A deeper order book can make it easier for other users to trade without significantly moving prices.
Market makers often use automated strategies that submit and adjust orders according to standardized sizes. Incentive structures can therefore produce repetitive activity, particularly when participants optimize their trading to qualify for rewards.
Diana said the CFTC receives Kalshi’s data every day and regularly reviews information submitted by the platform.
“It’s not that weird for them to sort of review our data on the regular,” she said.
Her comments draw a distinction between the regulator’s routine oversight of a registered market and a formal examination directed at suspected violations.
Still, incentive programs can complicate the interpretation of reported volume. If participants trade primarily to earn rewards rather than express genuine demand, headline volume may overstate the level of organic market interest.
Wash-Trading Concerns Increase Focus on Surveillance
The reports have also raised questions about the protections Kalshi uses to prevent wash trading and self-trading.
Wash trading involves transactions intended to create the appearance of market activity without producing a meaningful change in economic exposure. Self-trading occurs when orders linked to the same participant trade against each other, whether intentionally or through poorly coordinated automated systems.
Diana said Kalshi has “tons of tools” and a full surveillance team monitoring its markets.
She did not provide detailed information about the systems, thresholds or enforcement measures used to identify questionable activity. Market operators commonly limit those disclosures to avoid helping participants circumvent their controls.
Determining whether the repetitive trades represent ordinary market making, reward-driven activity, or prohibited conduct would require analysis of account ownership, order timing, and changes in participants’ economic exposure.
The publicly available data described in the reports does not provide all of that information.
The dispute comes as prediction markets grow rapidly and attract more attention from regulators, competitors and traditional financial firms.
Expansion into perpetual cryptocurrency contracts has increased the importance of accurate volume reporting, effective surveillance and transparent incentive programs. Institutional and retail users rely on volume and open-interest figures to judge a market’s liquidity and depth.
Kalshi also challenged speculation about the issue circulating on social media. Diana urged users not to believe everything they read on X and claimed some rumors had been promoted by competitors.
For now, the confirmed facts remain limited: Kalshi’s public data showed a high concentration of similarly sized trades, the company says liquidity incentives explain the activity, and the CFTC has not publicly confirmed a formal investigation.
