Kalshi has categorically denied being under investigation by the Commodity Futures Trading Commission (CFTC) over trading activity on its platform. According to The Wall Street Journal, Kalshi spokesperson Elisabeth Diana stated the company has not been contacted by the CFTC and does not believe there is any formal examination into its trading practices. Diana explained that the regulator 'sends our data every day to them and it's not that weird for them to sort of review our data on the regular.' The CFTC had not returned requests for comment sent Tuesday, adding to the uncertainty surrounding the regulatory status of the prediction market platform.
Recent analysis by CoinDesk has uncovered compelling evidence supporting wash-trading allegations against Kalshi. The investigation found that trades valued near $5,499 accounted for $7.7 million, or 57%, of the $13.5 million in transactions analyzed from September 17-20, while recurring $2,500 and $5,000 trade sizes made up 54% of the $8.5 million sampled bitcoin-perpetual volume. The pattern is particularly concerning as trade sizes repeated on 43 of 46 sampled dates since June, suggesting automated trading and raising serious questions about market manipulation. CoinDesk analyzed 3,450 ether-perpetual trades across 23 one-hour samples using the exchange's public API datasets, revealing that ether trades repeatedly clustered around recurring specific dollar targets with the prevailing trade size accounting for about 45% of the value across those samples. The Wall Street Journal reported similar data, adding that the CFTC was examining trading activity on Kalshi after nearly one million trades in an ether market were placed in similar amounts.
According to The Wall Street Journal, Coinbase has emerged as the first company to file with the CFTC for U.S. single-stock perpetual futures, marking a significant milestone in the regulatory approval process. The exchange filed its CFTC request on Friday, completing the second half of a two-regulator process that began with SEC notice registrations on September 1. As reported by The Wall Street Journal, Coinbase plans contracts on roughly 50 to 60 stocks, including major tech giants like Apple, Tesla, Microsoft, and Nvidia, with trading targeted for later this year. CEO Brian Armstrong reinforced the strategic importance, writing on X that it was 'time to bring stock perps onshore' as traders have been flocking to offshore platforms like Hyperliquid for similar leveraged stock exposure.
IcoBeast.eth has provided a detailed rebuttal to the wash-trading allegations, addressing several key concerns. He explained that the Artemis chart cited in the complaint actually measured prediction-market share rather than perpetual contract volume, and clarified that Kalshi's volume numbers appear inflated because they use the same reporting convention as Polymarket: volume reflects the maximum potential payout, not the upfront cash spent. For example, if a trader buys 100,000 contracts priced at 30 cents, they spend only $30,000 in cash, but the system records $100,000 in volume because that represents the total maximum value of the contracts at maturity. He firmly rejected claims that Kalshi handpicks a closed club of Self-Clearing Members, emphasizing that 'fair access' is legally mandated under CFTC regulations, meaning any firm that clears the necessary capital and operational hurdles is entitled to join. Additionally, he noted that Kalshi does not offer rebates on its crypto event prediction contracts, distinguishing it from major venues like the CME Group, Hyperliquid, and Binance that commonly use rebate programs. The exchange updated its temporary perpetual rebate program in a filing certified by the CFTC on September 16, rebating crypto perp taker fees down to 0.003% of trade value for self-clearing members, with the same filing excluding fees on trades under investigation for self-matching, wash trading, or pre-arranged trading.
According to Lookonchain, the coordinated filings come amid bearish ratio among US stock retail investors climbing to 53%, with institutions noting that the contrarian indicator is approaching the rebound zone. The regulatory push follows the CLARITY Act failing to advance in the Senate on September 15, missing the 60 votes needed to proceed. A day after that vote, SEC Chair Paul Atkins stated the agency will act 'with or without legislation' and use its existing statutory authority to provide regulatory certainty for American investors and entrepreneurs. The scrutiny comes as prediction markets have grown rapidly, drawing more attention to how platforms report trading volume and police activity between participants. Kalshi already offers U.S. crypto perpetual futures tied to Bitcoin, Ether, Solana and XRP after receiving CFTC approval for its Bitcoin perpetual contract in May, while Coinbase has filed similar perpetual futures applications for Apple, Tesla, Microsoft, Nvidia, Amazon, SPY and QQQ perpetuals. No enforcement action has been announced against Kalshi over the wash-trading claims, though CFTC staff warned in August that steep volume-based rewards can push participants to trade only to reach targets. CoinDesk reports that Kalshi's ether perpetual showed unusually heavy trading relative to open interest, with a volume-to-open interest ratio of 61 on Monday, compared to a median of about eight across other markets.
