The Commodity Futures Trading Commission is reviewing unusual trading activity on Kalshi’s Ethereum perpetual futures market, where nearly one million trades clustered around a $5,500 order size since August. This pattern, accounting for over $5 billion in volume, has drawn allegations of wash trading. Kalshi denies the claims, arguing the repeated sizes stem from ordinary market-making activity involving hundreds of distinct traders. The firm states self-trading is mechanically blocked and coordinated wash trading is monitored. Jump Trading and Wintermute are among firms involved in the rapid trades.
The Commodity Futures Trading Commission is reviewing unusual trading on Kalshi’s Ethereum perpetual futures market, according to a report. The report found close to one million trades clustered around the same $5,500 order size since August, accounting for more than $5 billion in volume.
The pattern has drawn allegations of wash trading, which is the practice of making trades with no real economic purpose. Kalshi flatly denies the claims, arguing the repeated sizes stem from ordinary market-making activity.
The company stated that hundreds of distinct traders took part and that the repeated order sizes reflect market makers keeping fixed resting orders. It added that self-trading is mechanically blocked and coordinated wash trading is barred and monitored.
The report identified Jump Trading and Wintermute as among the firms involved in the rapid trades. Jump Trading said it trades for its own profit, uses self-match prevention tools, and does not coordinate activity with other traders.
Kalshi is also fighting legal battles on several fronts. Baltimore sued Kalshi and Polymarket in August over allegedly offering unlicensed sports betting.
New York Attorney General Letitia James also sought to shut down the firm’s operations in the state. Kalshi recently handed former Congressman George Santos a lifetime ban and a $71,356 penalty after finding he traded on whether he would attend the State of the Union.
