The U.S. Commodity Futures Trading Commission is reviewing nearly one million similarly sized Ether perpetual futures trades on Kalshi, according to The Wall Street Journal. The activity generated more than $5 billion in volume over the past month, with more than one third of recent trades in a single Kalshi market clustering around $5,500. Regulators are examining whether the volume reflected genuine market activity before deciding whether to open a formal investigation. The CFTC has declined to comment and has not announced any finding of misconduct.
Kalshi rejected wash trading accusations and attributed the repeated trade sizes to its liquidity provider program. In a blog post, the platform said wash trading is explicitly prohibited, that there is no evidence of collusion or artificial trading, and that its systems prevent traders from matching their own orders. Kalshi said hundreds of distinct traders participated, with faster traders repeatedly filling market makers’ fixed-size orders. The company also described temporary fee rebates for qualifying members but said rebates cannot exceed fees paid. Kalshi’s head of cryptocurrency said the fee structure discourages artificial trading and suggested critics may have confused prediction market activity with perpetual futures activity.
The Journal identified Jump Trading and Wintermute among the firms involved. Jump said it trades independently for profit and prevents self-matching. The review follows a separate dispute in which New York Attorney General Letitia James sued Kalshi in July, seeking to block its event contracts and recover more than $36 billion. In August, the CFTC used emergency authority to order Kalshi to keep operating under federal market rules.
