Kalshi Denies CFTC Probe Into $5B Ether Trading Activity

Kalshi denies that the US Commodity Futures Trading Commission (CFTC) has contacted it over about $5 billion in Ether perpetual futures trading. The statement follows a Wall Street Journal report that the CFTC was reviewing rapid trades clustered around $5,500 and assessing possible wash trading. An earlier report identified nearly one million trades with similar $5,500 order sizes. More than one-third of recent trades were concentrated at that level, involving firms including Jump Trading and Wintermute. The CFTC review could still lead to a formal enforcement investigation, although no wrongdoing has been proven. Kalshi’s head of communications, Elisabeth Diana, called the claims “rumors seeded by competitors”. Kalshi said its liquidity incentive programmes pay market makers to maintain buy and sell orders at set sizes and price ranges. The company said hundreds of separate traders took those orders and that the market maker was often losing money, which it argued pointed to genuine trading rather than wash trading. The Wall Street Journal also reported that Kalshi waived fees, made monthly cash payments and offered some traders potential access to company equity for meeting volume targets. Kalshi did not directly address the equity arrangements. The platform says self-trading is blocked, wash trading is prohibited and monitored, and market makers are rewarded for liquidity rather than raw volume. The CFTC dispute raises regulatory and market-integrity risks for Kalshi’s expanding Ether perpetual futures business. Traders should monitor any regulator response, changes to liquidity incentives and the quality of reported volume. The issue may affect confidence and liquidity on Kalshi, but it does not currently indicate a problem with Ethereum’s network or long-term fundamentals.