Kalshi says CFTC has not contacted it over unusual trading patterns

Kalshi pushes back on reported CFTC scrutiny

Kalshi says the Commodity Futures Trading Commission (CFTC), the US regulator that oversees futures markets, has not contacted the company and that it does not believe it is under a formal investigation into trading on its platform.

The statement followed a Wall Street Journal report that the CFTC was looking at trading activity on Kalshi, a prediction market where users trade contracts on the outcome of future events. Kalshi says the trading patterns that drew attention come from a program that pays users to provide liquidity.

Key points

• Kalshi spokesperson Elisabeth Diana said the company has not been contacted by the CFTC and does not believe there is any formal examination.
• The Wall Street Journal reported that the CFTC was examining trades before deciding whether to open an enforcement investigation.
• Attention focused on nearly one million trades in an ether market placed in similar amounts.
• Kalshi says its liquidity incentive program explains the repeated trade sizes.

What Kalshi says about the review

Diana said in a statement: “We have not been contacted by the CFTC and don't believe there is any formal examination.” She added that the data patterns are typical of liquidity incentive programs and common in financial markets.

In an interview, she said Kalshi sends its data to the CFTC every day and that it is not unusual for the regulator to review that data regularly. Liquidity incentive programs reward market participants for placing orders, which helps create markets where other customers can buy or sell.

Asked about protections against wash trading and self-trading, Diana said Kalshi has “tons of tools” and a “full surveillance team in place.” Wash trading means transactions designed to look like real market activity without a genuine change in economic exposure. Self-trading is trading against your own orders.

The CFTC had not returned a request for comment sent Tuesday.

What the Wall Street Journal reported

The Wall Street Journal reported Tuesday that the CFTC was examining trading activity on Kalshi after nearly one million trades in an ether market were placed in similar amounts, according to the report. The regulator was reviewing the data before deciding whether to open an enforcement investigation.

What the trading data showed

CoinDesk reported early Tuesday that most trading volume on Kalshi's bitcoin and ether perpetual markets was made up of identically sized trades. A perpetual futures contract, or perp, is a derivative that tracks an asset's price without an expiry date. Many ether perp trades were clustered around $5,500, while bitcoin perp trades clustered around $2,500 or $5,000.

The activity had already drawn attention from Beni, a co-founder of research firm Stealth Neolab, who said Kalshi's ether perpetual recorded about $539 million in 24-hour volume against just $3.1 million in open interest. Open interest is the total value of contracts that are open and not yet closed. Beni said he later found that trades of exactly $5,500 made up 48% to 58% of notional volume on four days in September. Notional volume reflects the total value the trades represent. He said the figures came from Kalshi's public API, the interface that lets outside developers pull data from the platform.

What is confirmed and what is not

Confirmed: Kalshi has made its statements on the record, and the trading data described came from Kalshi's public API according to the researcher who reviewed it.

Not confirmed: whether the CFTC has opened a formal examination or enforcement investigation. The agency has not confirmed this and did not respond to a request for comment sent Tuesday. Kalshi says it has not been contacted.

Why it matters

Prediction markets have grown quickly, which has drawn more attention to how these platforms report trading volume and how they monitor activity between participants. The questions raised here centre on whether repeated, identically sized trades reflect real market activity or a rewards program.

Sources

• CoinDesk
• The Wall Street Journal (referenced by CoinDesk)

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