Prediction markets platform Kalshi has rejected reports that the U.S. Commodity Futures Trading Commission is formally examining unusual trading activity in its Ether perpetual futures market. The company stated it has received no contact from the regulator and does not believe any official examination is underway.

The statements follow a Wall Street Journal report that the CFTC is reviewing a sequence of rapid, highly clustered trades around roughly $5,500 each. Those trades accounted for more than $5 billion in Ether perpetual futures volume over the prior month and involved nearly one million transactions since August, according to the report and analysis of public data.

Details of the Reported Trading Pattern

The activity occurred in Kalshi’s market for perpetual futures linked to Ether, allowing participants to speculate on the cryptocurrency’s price without holding the underlying asset. Public trading data showed that trades of approximately $5,500 made up a substantial share of volume, including between 48 percent and 58 percent of notional volume on multiple days in September.

The pattern prompted allegations of wash trading, a practice in which trades create the appearance of market activity without genuine transfer of economic risk. Analysts had previously noted a wide gap between reported volume and open interest in the Ether contract, with one 24-hour period showing roughly $539 million in volume against about $3.1 million in open interest.

The Journal also reported that Kalshi had offered some traders opportunities to purchase equity in the company upon reaching specific volume targets. Additional incentives reportedly included waived trading fees and monthly cash payments intended to support liquidity provision by large participants.

Kalshi’s Response and Explanation

Elisabeth Diana, Kalshi’s head of communications, said the company has not been contacted by the CFTC. “We have not been contacted by the CFTC and don’t believe there is any formal examination,” she stated. She described circulating claims as “rumors seeded by competitors” and noted that the observed data patterns are typical of liquidity incentive programs common in financial markets. Diana also cautioned against relying on social media discussion of the matter.

In a blog post, Kalshi attributed the repeated trade sizes to its liquidity programs. Those programs compensate market makers for maintaining resting buy and sell orders of specified sizes within defined price ranges. The company emphasized that the payments reward the availability of liquidity rather than the volume of executed trades.

Kalshi explained that a single market maker posting fixed-size orders can produce clusters of similar trade sizes when those orders are repeatedly accepted by multiple takers. The firm said the activity involved hundreds of distinct traders. It further noted that the takers were “pretty consistently right” while the market maker was “pretty consistently wrong,” which it presented as evidence of genuine economic activity rather than wash trading.

The company stated that self-trading is mechanically blocked on its platform and that trading between related parties is subject to strict monitoring. It also clarified aspects of its fee structure, noting that certain temporary rebates for self-clearing members are in place but that the overall program excludes transactions resulting from or under investigation for wash trading, self-matching, or pre-arranged activity.

Context of Rapid Growth in Perpetual Futures

Kalshi launched its perpetual futures markets in May following CFTC approval of its Bitcoin perpetual futures contract. About a week after the launch, the company reported that trading volume had surpassed $1 billion. The platform has since expanded offerings to include Ether and other cryptocurrencies under a regulated framework.

The Journal report indicated that the CFTC is reviewing the trading data and will decide later whether to open a formal enforcement investigation. The agency has not publicly confirmed the status of any review.

Kalshi’s explanation focuses on standard market-making mechanics in which resting orders of consistent size are hit by faster traders responding to price movements on other venues. The firm maintains that its surveillance tools and rulebook prohibitions address potential abusive practices, while the repeated sizes themselves arise naturally from the design of its liquidity incentives.