Kalshi Faces Wash Trading Allegations Over Ether Futures Trades

Kalshi, a US-based exchange regulated by the Commodity Futures Trading Commission (CFTC), is facing accusations of inflating its crypto volume through thousands of identical $5,500 trades on its ether futures market.

The allegations were made by Beni, a former quantitative trader and co-founder of research firm Stealth Neolab, who pulled trade records from Kalshi's public data feed. He counted roughly $539 million in 24-hour volume in the ether perpetual market against about $3.1 million of open interest.

Kalshi denied wash trading, saying that Beni had blurred prediction markets with crypto perpetual futures contracts. The exchange's head of crypto, IcoBeast, also disputed Beni's claims, saying that Kalshi does not hand-pick firms allowed to clear their own trades and that fair access is a regulatory requirement.

The CFTC staff warned in August that steep volume-based rewards can push participants to trade only to reach targets. Kalshi updated its temporary perpetual rebate program in a filing certified by the CFTC on September 16, which excludes fees paid on trades resulting from or under investigation for self-matching, wash trading, or pre-arranged trading.