Kalshi Denies CFTC Investigation Amid Cryptocurrency Trading Controversy

Kalshi has denied being under formal investigation by the Commodity Futures Trading Commission (CFTC) after unusual trading patterns in its Bitcoin and Ether perpetual markets drew attention. The exchange attributes these patterns to its liquidity incentive program, which rewards market participants for supplying orders and maintaining active markets.

The CFTC is reportedly reviewing trading data involving nearly one million similarly sized ether transactions before deciding whether an enforcement investigation is warranted. Kalshi disputes the suggestion that this amounts to a formal examination, stating they have not been contacted by the CFTC.

Kalshi's liquidity incentive program rewards market participants for maintaining active markets, which may explain the repetitive trades seen in its Bitcoin and Ether perpetual markets. The exchange has 'tons of tools' and a full surveillance team in place to prevent wash trading and self-trading.