Kalshi: CFTC has not contacted firm over $5B Ether trades

Prediction markets operator Kalshi says the Commodity Futures Trading Commission has not contacted the firm and there is no formal examination after reports that the regulator was reviewing a cluster of roughly $5,500 trades that together represented more than $5 billion in Ether perpetual futures volume.

The trades occurred in Kalshi’s Ether perpetual futures market, a product launched in May that lets traders hold positions on Ether’s price without owning the token. The company reported rapid early growth in the business, saying trading volume topped $1 billion within a week of the launch.

Kalshi’s head of communications, Elisabeth Diana, described the public discussion around the trades as competitive rumor and urged against assuming misconduct based solely on repeating trade sizes. The company added that it has not been contacted by the CFTC.

In a blog post, Kalshi attributed the repeated $5,500 trade sizes to liquidity incentive programs that pay market makers to post buy and sell orders at set sizes and price ranges. The firm wrote that those payments reward the presence of resting orders rather than the volume of executed trades. Kalshi explained that many different takers can execute against a single fixed-size resting order, producing repeated trade sizes.

Kalshi also said the trades involved hundreds of distinct takers who were often correct in their executions while a single market maker was often on the losing side, which the company framed as evidence of genuine trading activity. The post included the line: “The fixed size trades are entirely consistent with a single maker putting up resting orders of a fixed size and getting traded against by many takers.”

Some reports have said Kalshi offered fee waivers, monthly cash payments to large traders and opportunities to buy equity for meeting volume targets. Kalshi addressed payments to market makers in its blog but did not directly address the equity-purchase claim.

Perpetual futures are derivative contracts that let traders hold positions indefinitely, often with leverage; market makers provide continuous buy and sell quotes to supply liquidity and can profit from spreads but face losses if prices move against them. Wash trading refers to coordinated trades intended to create fake volume without any side taking real market risk or realizing profit or loss.

Kalshi rejected allegations that the observed trading pattern amounted to wash trading, calling the pattern consistent with formal liquidity programs where fixed order sizes and multiple independent takers can produce repeated trade amounts. The company maintains its market-making programs are intended to ensure available counterparties for traders in its perpetual futures markets.