Identical $5,500 Trades Raise Wash‑Trading Concerns on Kalshi’s Ether Perpetual Market

Kalshi, a U.S. exchange regulated by the CFTC, launched crypto‑linked futures contracts in June. Recent analysis of its public data feed revealed a striking pattern: the same $5,500 order repeatedly appeared in the ether perpetual market, accounting for roughly half of the daily volume on multiple days.

Volume anomaly identified

Quantitative trader Beni, co‑founder of Stealth Neolab, compiled trade records and reported about $539 million of 24‑hour volume in the ether perpetual market, while open interest was only around $3.1 million. He noted that the $5,500 trade size made up 48‑58 % of all ether perpetual volume on four separate days.

Kalshi’s response

Kalshi’s head of crypto, posting as IcoBeast, said the observations conflated two distinct products: prediction markets and crypto perpetual futures. The exchange does not offer rebates for its prediction‑market products and maintains that any rebate program applies only to self‑clearing members of the perpetual market.

In a filing certified by the CFTC on 16 September, Kalshi outlined a temporary perpetual‑rebate program that reduces taker fees to 0.003 % of trade value for eligible members. The filing also states that fees on trades under investigation for self‑matching, wash trading, or pre‑arranged trading are excluded, and the chief regulatory officer can revoke a firm’s participation.

Regulatory context

CFTC staff previously warned that volume‑based incentives could encourage participants to trade solely to meet targets, raising the risk of market manipulation. Wash trading—where a party trades with itself to fabricate activity—is prohibited under U.S. commodities law. No enforcement action has been announced against Kalshi to date.

Broader market impact

Kalshi’s bitcoin perpetual market recently cleared $1 billion in a single day, a volume level that its prediction markets required 40 months to achieve. The current scrutiny focuses on the ether perpetual market and the potential implications for the exchange’s volume reporting practices.