Kalshi Terminates Incentive Program Amid Wash Trading Scrutiny
Kalshi, a prediction market operator, has decided to terminate its Volume Incentive Program on October 13, nearly a year earlier than initially planned. The move comes amidst scrutiny over $5B+ in crypto perpetual futures volume and allegations of wash trading.
Kalshi disputes the allegations, stating that a market maker's resting orders were executed by hundreds of traders, which explained the repeated $5,500 trade size seen in the market. According to Kalshi, its systems prevent coordinated trades and monitor for prohibited activity.
The Volume Incentive Program was introduced in February 2023 to encourage trading activity across Kalshi's markets. Participants received rewards based on their share of qualifying trading volume. Despite the controversy, Kalshi recorded $52.98B in volume through September 29, exceeding its previous monthly record.
Kalshi is also reportedly in advanced talks to raise about $1 billion at a valuation of roughly $40 billion, with investor interest increasing due to its accelerated trading activity. ARK Invest has gained direct exposure to Kalshi through its exchange-traded funds (ETFs).