Kalshi says CFTC hasn’t contacted it over ‘unusual’ $5B trading activity

Kalshi, the operator of prediction markets, told Cointelegraph it has not been contacted by the Commodity Futures Trading Commission and does not believe it is subject to a formal inquiry, responding after media reports that the regulator was examining unusual trading in the firm’s Ether perpetual futures market. The Wall Street Journal had said the CFTC was reviewing a pattern of rapid trades clustered near $5,500, a pattern that prompted allegations of wash trading.

The Journal reported that those roughly $5,500-sized trades contributed more than $5 billion in Ether perpetuals volume over the previous month. The coverage also said Kalshi offered some traders opportunities to acquire equity if they met trading-volume targets and that the company had waived trading fees and provided monthly cash payments to encourage large traders to supply liquidity.

Kalshi has attributed the repeated trade sizes to its liquidity incentive programs. In a blog post, the firm said it pays market makers to post buy and sell orders at predetermined sizes and price ranges, and that those payments compensate the presence of orders rather than the volume executed. The post did not directly address the Journal’s reporting about equity-purchase opportunities tied to trading targets.

Responding to claims of wash trading, Kalshi argued the activity reflected genuine market interaction between market makers and many distinct takers. The company said the fixed-size transactions are consistent with a single maker posting resting orders that numerous takers trade against, and noted that takers frequently realized profits while the maker often lost money—an outcome it said indicates real economic activity rather than artificially inflated volume.