Kalshi Denies Wash Trading Allegations Amid Unusual Ethereum Perpetuals Activity
Prediction market platform Kalshi is facing scrutiny over a report that found unusual trading patterns in its Ethereum perpetual contracts. A Wall Street Journal analysis revealed that nearly one-third of Kalshi's Ethereum-related trades were clustered around the same $5,500 order size, generating more than $5 billion in volume over the past month. Critics have raised concerns about potential wash trading—a form of market manipulation—though Kalshi has denied these allegations. Kalshi attributed the repeated trade sizes to its liquidity-provider program and stated that such activity is explicitly banned under platform rules. The company also clarified it was not engaging in prediction-market activities related to this volume, but rather perpetual-futures contracts. A pseudonymous analyst named Beni claimed $5,500 trades accounted for 58% of Kalshi's Ethereum perpetuals volume on four separate days. The Commodity Futures Trading Commission (CFTC) has not yet commented on the matter. This is reminiscent of a Columbia University study from last year that estimated nearly 25% of Polymarket’s trading volume over three years involved wash trades, though no complicity was attributed to the platform itself.
Topics: Ethereum (ETH) Kalshi liquidity providers prediction markets wash trading