CFTC Reviews Kalshi After $5B in Ether Perp Trades

The Commodity Futures Trading Commission is reviewing nearly one million ether perpetual futures trades on Kalshi that occurred in almost identical amounts and accounted for more than $5 billion in volume over the past month.

A $5,500 cluster

An analysis of public data reportedly found that more than one third of trades in the market in recent weeks were clustered around $5,500.

The cluster prompted allegations of wash trading, meaning trades without genuine economic purpose that can create a misleading impression of market activity. Kalshi denies the allegations. The company said hundreds of distinct traders participated and that the repeated trade sizes came from market makers keeping fixed resting orders in the book, which faster traders repeatedly hit. Kalshi said self trading is mechanically blocked and coordinated wash trading is prohibited and monitored.

The CFTC is weighing the activity before deciding whether to open an enforcement investigation, a person familiar with the matter reportedly said. The agency said it could not comment on whether an investigation is underway.

Jump Trading and Wintermute were reportedly among the firms involved in the rapid transactions. Jump said it trades for profit, uses self match prevention tools and does not coordinate its activity with other traders. Wintermute’s response was not known.

Stakes for Kalshi’s expansion

Kalshi launched crypto perpetual futures, contracts with no expiry date, in May and has since sought regulatory approval to offer similar contracts tied to individual US stocks. The review lands with that application pending, and with more than a third of the market’s recent trades tied to a single price level, it raises questions about how much of the young market’s volume is organic.