Kalshi is facing intensifying scrutiny over activity in its crypto-linked prediction markets and perpetual futures, with independent researchers and trader Beni alleging patterns consistent with wash trading and artificial liquidity.
The first set of concerns centers on short-duration contracts tied to Bitcoin intraday price moves, including 5-minute and 15-minute outcomes. Analysts say they found repeated trades at identical prices and sizes within seconds, maker-side volume above 80% in some markets, and clusters of trades executed by the same wallet addresses on both sides of the order book. Other cited patterns include frequent zero-spread conditions where bid and ask converge, which can be consistent with self-trading strategies designed to inflate volume.
Kalshi operates as a CFTC-regulated designated contract market, setting it apart from offshore prediction platforms. Its rules prohibit wash trading and manipulative behavior, and the exchange has emphasized compliance and surveillance systems.
In a separate September 20 thread on X, trader Beni questioned roughly $538.6 million in 24-hour Ethereum perpetual volume compared with about $3.1 million in open interest, a turnover of roughly 174 times open interest. He also pointed to a leaderboard showing the largest position at just $17,598 at the time. Kalshi crypto lead IcoBeast denied the claims, saying prediction-market data had been confused with perpetual-futures activity.
Kalshi’s temporary fee rebate program for crypto perpetuals has also drawn attention. Under a CFTC filing, eligible takers can receive rebates reducing fees to 0.003%, while eligible makers can receive payments equal to 0.003%. Beni argued the structure could lower the cost of matched trading. Kalshi says self-matching, wash trading, pre-arranged trades and other suspected abusive transactions are excluded from rebate eligibility, and its chief regulatory officer can remove participants and begin disciplinary proceedings. The exchange also says it uses Nasdaq Market Surveillance.
No public CFTC enforcement action accused Kalshi of wash trading in its crypto perpetual markets as of September 21. Even so, the debate highlights familiar challenges in emerging prediction and crypto derivatives markets: ensuring reported volume reflects genuine economic interest rather than mechanical or strategic trading.
