Kalshi said the Commodity Futures Trading Commission has not contacted the company and denied that any formal investigation has begun. The statement came after reports raised questions about trading patterns in the platform's Bitcoin and Ether perpetual markets.
Kalshi spokesperson Elisabeth Diana said the company submits trading data to the CFTC daily and that routine regulatory reviews would not be unusual given the regulator's access to market information.
Unusual Trade Sizes Spark Questions
Reports identified repeated trade sizes across Kalshi's crypto contracts, including numerous Ether trades near $5,500 and Bitcoin trades near $2,500 or $5,000. The Wall Street Journal reported that the CFTC was reviewing activity to determine whether to launch an enforcement investigation, citing nearly one million Ether trades that appeared in similar amounts.
Researcher Beni compared about $539 million in daily Ether perpetual volume with $3.1 million in open interest using data from Kalshi's public API, raising questions about the volume figures.
Platform Explains Trade Patterns
Diana attributed the repeated trade sizes to Kalshi's liquidity incentive program, which rewards participants for placing orders that help other customers buy or sell contracts more easily. She said such programs can naturally produce the observed trading patterns.
Kalshi stated it operates surveillance tools and maintains a dedicated team to detect self-trading and wash trading, the latter of which creates the appearance of market activity without changing a trader's actual exposure. The company said its controls monitor for such behavior.
Broader Context for Crypto Derivatives
Prediction markets have expanded rapidly, drawing increased regulatory attention to trading volume, market surveillance, and trading controls. The growth reflects broader interest in crypto-linked derivatives as exchanges seek regulatory approval for new products and compete for users and trading activity. Other firms, including Coinbase, are pursuing approval for crypto-linked derivatives offerings in the United States.
