Kalshi is pushing back against questions surrounding billions of dollars in repetitive trading on its Ether perpetual-futures market, saying the Commodity Futures Trading Commission has not contacted the company and that it does not believe a formal examination is underway. The dispute centers on whether unusually uniform trades reflect genuine market-making activity or warrant deeper market-integrity scrutiny. The Wall Street Journal separately reported that the CFTC was reviewing the activity before deciding whether to open an enforcement investigation.
Kalshi communications chief Elisabeth Diana said the company submits trading data to the CFTC every day and argued that routine regulatory review should not be confused with a formal investigation. Kalshi attributes the repeated trade sizes to liquidity incentives used to build depth in its relatively new perpetual markets. The exchange launched U.S. crypto perpetuals in June, including an Ether contract representing 10 ETH per full contract.
Fixed Trade Sizes Raise Volume-Quality Questions
A self-published September 21 working paper by researcher OctopusTakopi analyzed 4.1 million Kalshi trades worth approximately $11.49 billion between September 5 and 18. The paper found that trades centered around $5,500 represented 59% of sampled Ether volume, while recurring $5,000 and $2,500 tickets similarly dominated Bitcoin perpetual activity. It also found unusually high turnover relative to open interest and benchmark venues.
The analysis does not establish wash trading as a proven fact. Its author explicitly notes that Kalshi’s public trade data does not contain an account field, preventing direct identification of counterparties. The evidence therefore demonstrates unusual concentration and trading patterns, not independently verified collusion or self-dealing. That distinction is critical when assessing an allegation that carries both regulatory and reputational consequences.
Kalshi published its own detailed response to the perpetual-volume allegations, arguing that a market maker was repeatedly maintaining fixed-size resting quotes while faster takers traded against prices that had become stale. The company says hundreds of distinct takers participated and that those traders generated actual profits and losses, which it argues is inconsistent with artificial volume creation. Kalshi also says self-trades are mechanically blocked and coordinated trading is prohibited and monitored.
The incentive structure provides additional context. Kalshi says its liquidity-provider programs can compensate firms for continuously maintaining bids and offers of specified minimum sizes and spreads, while a separate temporary program rebates perpetual-futures trading fees for qualifying self-clearing members. These arrangements can produce repetitive order sizes without proving that the resulting executions are wash trades. Public CFTC records confirm that Kalshi has filed liquidity and trading-incentive programs with the regulator.
Regulatory Review Remains Unconfirmed Publicly
The episode places market surveillance at the center of Kalshi’s expansion beyond event contracts. Crypto perpetuals use leverage, continuous trading and funding payments, making reported volume, open interest and execution quality especially important when assessing market depth. Large headline volume does not necessarily mean equivalent liquidity or independent directional demand, particularly when a substantial share comes from recurring market-making flows. Kalshi itself distinguishes historical trading volume from forward-looking order-book liquidity.
Market integrity has already become a broader operating issue for the platform. Kalshi recently suspended a congressional candidate for trading contracts linked to her own election, while it has also tightened age-verification controls as regulatory scrutiny increased. Those developments concern different risks, but together they illustrate how surveillance and compliance controls are becoming more important as Kalshi expands its product set.
The broader derivatives market is also moving rapidly toward perpetual products. CryptoCurrencyMagazine has tracked 24/7 perpetual futures linked to tokenized equities as well as leveraged crypto derivatives increasingly influencing market structure. Kalshi’s case adds a different question: how much reported activity represents durable market depth versus incentive-driven turnover.
The next concrete milestone is regulatory clarification. A public CFTC statement, formal inquiry or additional surveillance disclosure from Kalshi would establish whether the episode remains a dispute over market microstructure or advances into an enforcement matter. Until then, the verified record consists of statistically unusual trading patterns, Kalshi’s detailed liquidity-based explanation and a reported CFTC data review that the regulator itself has not publicly confirmed.
