CFTC Probes Kalshi's Ether Perps Over Repeating Trades

The Commodity Futures Trading Commission (CFTC) is investigating trading activity in Kalshi's ether perpetual futures market. According to The Wall Street Journal, the regulator is reviewing the activity before deciding whether to open an enforcement investigation.

An analysis of public trading data by The Journal found nearly 1 million trades of almost identical size in the market, with more than a third of trades in recent weeks clustered around $5,500. This pattern accounted for over $5 billion in ether perp volume over the past month, with firms like Jump Trading and Wintermute involved.

Kalshi, one of the first exchanges to offer crypto perpetuals under US regulation, has responded to the allegations by explaining that the fixed-size trades reflect a single market maker being repeatedly picked off by faster traders. The exchange pointed out that the takers came out ahead, with roughly $98,000 in taker profit in one analysis as evidence against wash trading.

Kalshi also emphasized its own measures to prevent self-trading and market manipulation, including blocking self-clearing members from profiting from perp fees. The allegations come as the company seeks approval for similar contracts tied to individual US stocks.