Kalshi Denies CFTC Investigation Amid Scrutiny Over Ether Perpetual Futures Trading

Kalshi, a CFTC-regulated prediction market that ventured into crypto derivatives, is pushing back against claims of an investigation by federal regulators. The company asserts it hasn't received any communication from the CFTC and attributes the trading patterns sparking scrutiny to legitimate market-making activities.

A report in The Wall Street Journal highlighted Kalshi's ether perpetual futures market, where nearly one million trades occurred within a single month, with each trade worth roughly $5,500 in notional value. This has accumulated over $5 billion in volume.

The volume-to-open-interest ratio in Kalshi's ether perpetual market reached as high as 174x, indicating the dollar amount exchanged far surpasses actual positions held. Kalshi spokesperson Elisabeth Diana directly addressed the speculation: 'We have not been contacted by the CFTC and don't believe there is any formal examination.'

Kalshi argues its systems prevent self-trades and actively monitor for coordinated activity, pointing to its track record of cooperating with regulators. The company has referred dozens of insider-trading cases to the CFTC and enforced penalties in past incidents.