Why Thousands of Identical $5,500 Trades Put Kalshi in the Spotlight

Source Beincrypto

Thousands of identical $5,500 trades on Kalshi’s ether futures market have triggered accusations that the exchange inflates its crypto volume. Kalshi denies wash trading.

Kalshi is a US exchange regulated by the Commodity Futures Trading Commission (CFTC). It runs prediction markets and, since June, futures contracts tied to crypto prices.

Kalshi Wash Trading Claims Center on One Order Size

Beni, a former quantitative trader and co-founder of research firm Stealth Neolab, pulled trade records from Kalshi’s public data feed. One order size dominated the tape.

He counted roughly $539 million of 24-hour volume in the ether perpetual market against about $3.1 million of open interest. Open interest measures the value of positions still held open.

“On ETH the exact same $5500 trade size keeps appearing over and over again… it literally made up 48%-58% of ALL ETH PERP volume on 4 separate days,” said Beni.

Those numbers cannot be rebuilt exactly after the fact because the trading data changes by the second. Beni said he saved copies before publishing.

Kalshi Says Two Separate Products Were Confused

Kalshi’s head of crypto, who posts as IcoBeast, said Beni had blurred prediction markets with crypto perpetual futures contracts.

“We don’t do rebates for crypto prediction markets… All exchanges run rebate and incentive programs to help provide better liquidity on the exchange for traders. CME does it. So does Hyperliquid and Binance,” they challenged.

He also denied that Kalshi hand-picks the firms allowed to clear their own trades, saying fair access is a regulatory requirement.

Kalshi updated its temporary perpetual rebate program in a filing certified by the CFTC on 16 September. It rebates crypto perp taker fees down to 0.003% of trade value for self-clearing members, and leaves makers netting the same.

The same filing excludes any fees paid on trades that result from, or are under investigation for, self-matching, wash trading or pre-arranged trading. Kalshi’s chief regulatory officer can revoke a firm’s place in the program.

Regulators flagged the wider risk in August. CFTC staff warned that steep volume-based rewards can push participants to trade only to reach targets.

No enforcement action has been announced against Kalshi over the claims. Wash trading, where one party buys and sells with itself to fake activity, already breaks US commodities law.

BeInCrypto reported in June that Kalshi’s bitcoin perpetual market cleared $1 billion in days, a level its prediction markets took 40 months to reach.

Beni said lawyers are reviewing further material before he publishes it.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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