Kalshi Faces Wash-Trading Scrutiny Over Crypto Perpetual Volume

The controversy ignited on September 20 when Beni claimed on X that Kalshi’s ETH-PERP volume reached roughly $538.6 million within 24 hours, despite open interest hovering near $3.1 million. The trader argued that this 174-fold ratio, combined with a temporary fee rebate program for market makers, created conditions ripe for artificial volume. Kalshi’s crypto lead, known as IcoBeast, rejected the claims, asserting that critics are conflating two distinct products: prediction markets and perpetual futures.

Kalshi’s regulatory filings confirm that a fee rebate program exists for perpetual markets, allowing eligible participants to net 0.3 basis points. However, the exchange explicitly states that transactions identified as wash trades, self-matching, or pre-arranged are ineligible for these rebates. While the CFTC has issued recent guidance warning that incentive structures can potentially encourage non-competitive trading if surveillance is inadequate, no enforcement action has been taken against Kalshi regarding these specific allegations. The exchange maintains that its surveillance, bolstered by a partnership with Nasdaq Market Surveillance, is designed to detect and deter abusive activity.