Kalshi says CFTC has not contacted it over $5B in Ether futures trades
Kalshi says no regulator contact over Ether futures trades
Kalshi, a prediction markets operator, says the Commodity Futures Trading Commission has not contacted it and that it does not believe there is any formal examination of its trading activity. The company was responding to a news report that the regulator is reviewing a burst of trades in its Ether perpetual futures market.
Perpetual futures let users bet on the price of an asset without buying it. In this case, the market involved is tied to the price of Ether.
Key numbers and claims
- The Wall Street Journal reported that the CFTC is examining rapid trades clustered around $5,500 each, citing a person familiar with the matter.
- Those trades added up to more than $5 billion in Ether perpetual futures volume over the past month, according to the Journal.
- The trading pattern led to allegations of wash trading — activity where volume rises without either side taking a profit or a loss.
- Kalshi launched its perpetual futures markets in May. A week after launch, it told CNBC that trading volume had passed $1 billion.
What Kalshi says about the trades
Elisabeth Diana, head of communications at Kalshi, called the discussion "rumors seeded by competitors." She told Cointelegraph that Kalshi has not been contacted by the CFTC and does not believe there is any formal examination.
Diana said the data patterns are typical of liquidity incentive programs and common in financial markets, adding, "Don't believe everything you read on X."
In a blog post, Kalshi tied the repeated trade sizes to programs that pay market makers to keep buy and sell orders available at set sizes and within a set price range. Market makers are firms that continuously quote prices at which they are willing to buy and sell, giving other traders someone to trade with. Kalshi said the payments reward the availability of orders, not the number of trades completed.
Kalshi also said the trades involved hundreds of different traders taking a market maker's orders. According to Kalshi, the takers were "pretty consistently right" and the maker was "pretty consistently wrong," which the company described as a sign of genuine economic activity rather than wash trading.
The blog post did not directly address the Journal's report that Kalshi offered some traders the chance to buy equity in the company if they hit trading-volume targets.
What the Wall Street Journal reported
The Journal reported that the CFTC is reviewing a pattern of rapid trades clustered around $5,500, citing a person familiar with the matter. It also reported, citing people familiar with the arrangements, that Kalshi offered some traders opportunities to buy equity in the company if they met trading-volume targets. The Journal further said the company waived trading fees and made monthly cash payments to encourage large traders to provide liquidity.
What is confirmed and what is not
Confirmed by Kalshi: the company says it has not been contacted by the CFTC and does not believe there is a formal examination. Kalshi has also publicly given its own explanation for the repeated trade sizes.
Reported but not confirmed by the regulator: the CFTC's review, the roughly $5,500 trade size, the more than $5 billion in monthly Ether perpetual futures volume, the equity opportunities tied to volume targets, the waived fees and the monthly cash payments. The CFTC has not commented in the supplied material, and the Journal's reporting relies on people familiar with the matter.
Why the scrutiny matters for Kalshi
The questions come as Kalshi has reported fast growth in its perpetual futures business, which it entered in May. How the CFTC responds could affect how the company's trading activity is viewed, but no regulatory action has been announced in the supplied material.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.