Key facts
- Kalshi has not been contacted by the CFTC regarding its Ether perpetual futures market.
- The CFTC is reportedly examining a pattern of rapid trades around $5,500 in Kalshi's Ether perpetual futures market.
- Kalshi attributes the trading patterns to liquidity incentive programs that pay market makers.
- The company denies allegations of wash trading, stating the trades show genuine economic activity.
- Kalshi's perpetual futures trading volume surpassed $1 billion a week after launching in May.
Prediction markets operator Kalshi has stated it has not been contacted by the Commodity Futures Trading Commission (CFTC) and does not believe a formal examination is underway, following a report that the regulator was scrutinizing unusual trading activity in its Ether perpetual futures market. The Wall Street Journal reported Tuesday that the CFTC is examining a pattern of rapid trades clustered around $5,500, citing a person familiar with the matter, which has led to allegations of wash trading.
Kalshi attributes the trading patterns to its liquidity incentive programs, which reward market makers for providing buy and sell orders at specified sizes and price ranges. The company stated these payments reward the availability of orders, not the volume of trades executed. Kalshi denied wash trading claims, explaining that fixed-size trades are consistent with a single market maker's resting orders being traded against by multiple takers, and that the observed activity indicates genuine economic engagement rather than wash trading.
Kalshi has reported significant growth in its perpetual futures business, with trading volume surpassing $1 billion within a week of launching its markets in May. Elisabeth Diana, head of communications at Kalshi, described the discourse as "rumors seeded by competitors" and urged people "Don’t believe everything you read on X."