Kalshi Tells CFTC: Chill, We're Not Being Investigated (Probably) 🧊

Kalshi said the U.S. Commodity Futures Trading Commission has not contacted the company and does not believe a formal examination has been opened into its trading activity, pushing back against reports of regulatory scrutiny over the prediction market's ether perpetual contracts. "We have not been contacted by the CFTC and don't believe there is any formal examination," Kalshi spokesperson Elisabeth Diana said in a statement. "As we've said, these data patterns are typical of liquidity incentive programs and common in financial markets."

The Wall Street Journal reported Tuesday that the CFTC was reviewing trading data on Kalshi after nearly one million trades in an ether market were placed in similar amounts, weighing whether to open an enforcement investigation. The agency declined to confirm or deny an investigation. The scrutiny stems from CoinDesk's earlier reporting that the majority of trading volume on Kalshi's bitcoin and ether perpetual markets consisted of identically-sized trades, with many ether perp trades clustered around $5,500 and bitcoin perp trades around $2,500 or $5,000.

Researcher Beni, a co-founder of Stealth Neolab, drew initial attention to the patterns, noting Kalshi's ether perpetual recorded about $539 million in 24-hour volume against just $3.1 million in open interest. He later found that trades of exactly $5,500 made up 48% to 58% of notional volume on four days in September, drawing on Kalshi's public API. Diana attributed the patterns to Kalshi's liquidity incentive program, which rewards participants for providing liquidity. "We send our data every day to them [the CFTC], and it's not that weird for them to sort of review our data on the regular," Diana said in an interview. The CFTC had not returned a request for comment sent Tuesday.

The activity comes as prediction markets have grown rapidly, drawing increased attention to how platforms report trading volume and police activity between participants. Liquidity incentive programs typically reward market participants for posting orders that improve depth and tighten spreads on exchanges and other trading venues.