Kalshi Faces Wash-Trading Claims Over Crypto Perps

Kalshi is facing wash-trading allegations over its crypto perpetual futures after quant analyst Beni flagged $539 million in Ether perpetual volume against just $3.1 million in open interest. He also highlighted repetitive $5,500 trades that accounted for as much as 58% of Kalshi's Ether perpetual volume across four days. Kalshi product executive IcoBeast.eth rejected the claims and said the figures reflect the platform's mechanics and regulatory structure.

Why it matters

The 174-to-1 volume-to-open-interest ratio became the central point of contention. Open interest measures the value of outstanding contracts, while volume tracks contracts that changed hands. Beni argued that the gap, combined with repeated trade sizes, was a textbook sign of wash trading.

He also pointed to a fee schedule filed with the CFTC that can produce a net-zero fee for certain Self-Clearing Members through a 0.3-basis-point maker rebate and a 0.3-basis-point taker fee. His argument is that removing trading costs can increase the incentive to inflate reported activity.

Kalshi disputed both the interpretation and the mechanics behind the allegations. IcoBeast.eth said one chart cited by Beni measured prediction-market share rather than perpetual volume. He also said Kalshi reports event-contract volume using maximum potential payout, not the cash paid upfront. A trader spending $30,000 on contracts with a $100,000 maximum payout would generate $100,000 in reported volume under that convention.

Market impact

Kalshi says the convention is consistent with industry practice, including Polymarket, and represents real user demand rather than fabricated trading. It also says its crypto event contracts do not receive rebates, while noting that rebates are common at venues such as CME Group, Hyperliquid, and Binance.

The dispute puts scrutiny on how regulated prediction markets report activity as they expand into derivatives. Kalshi argues that its status as a CFTC-regulated Designated Contract Market requires incentive programs to be filed publicly and that fair-access rules allow any qualified firm to become a Self-Clearing Member.