Kalshi Ends Volume Rewards as $5B of Ether Perp Trades Draw Scrutiny

Kalshi has filed to shut the program that pays its traders for volume, effective no earlier than 13 October. The filing with the Commodity Futures Trading Commission gives no reason for the decision. It follows a Wall Street Journal report that the regulator examined clusters of near-identical trades in Kalshi's ether perpetual futures, many of them close to $5,500 each, adding up to more than $5 billion of volume over a month. The exchange says wash trading does not happen on its platform.

Two dates for one filing

The filing date does not settle. The Block and crypto.news both put it on Monday, 28 September, and Unchained dates it to 29 September. No correction has appeared on either, and the two do not reconcile. Every account agrees on the effective date and on the absence of any stated reason. gokhshtein adds that Kalshi filed as a self-certification under Section 5c(c) of the Commodity Exchange Act, the route that puts a rule change into force unless the regulator steps in, though no other outlet read here names the provision.

What the rewards actually paid for

The Volume Incentive Program split fixed prize pools among traders in proportion to their share of eligible volume. Event contracts qualified when they traded between 3 and 97 cents on the central limit order book. Perpetual futures carried no such price restriction, on Unchained's account, and market makers were kept out of the pools with their own compensation capped at half a cent per contract. The Block dates the program's launch to March 2023, a detail the other accounts leave out. Unchained also reports an original end date of 1 October 2027, which would make this a year early; that date is single-sourced.

Four counts of the same pattern

How much of Kalshi's ether volume the repeated trades cover depends on who did the counting. The Journal's analysis, as relayed by Benzinga, puts it above a third. Unchained, citing the pseudonymous analyst Beni, says about half across multiple days, and Benzinga has the same analyst at up to 58% on certain days. The Block carries a different measure again, $539 million of 24-hour ether perp volume against $3.1 million of open interest. Different windows, different denominators, and no single share that all four support.

"Wash trading is explicitly banned in our rulebook," Kalshi said, adding that it had "seen no evidence of collusion or wash trades."

The company's explanation for the repeated sizes is its own liquidity arrangement: market makers post resting orders at fixed sizes, and faster traders keep hitting them. Kalshi's crypto lead, who goes by IcoBeast, argued to Benzinga that the fee structure alone should discourage the practice. The exchange also says it has not been contacted by the CFTC and is not under investigation. The agency did not comment.

Record volume while the pools were open

September was Kalshi's biggest month. Volume reached $52.98 billion through 29 September against $38.67 billion in August, on figures The Block and crypto.news both carry, and the rewards were live for all of it. crypto.news, citing a Reuters report on Tuesday, adds that the exchange is negotiating roughly $1 billion at a valuation near $40 billion, up from $22 billion in May; no other account read here repeats it.

The regulator had already put exchanges on notice. Unchained reports a CFTC advisory in August cautioning that volume-based incentives can encourage participants to trade solely to reach volume targets, with venues asked to review and amend such programs by 14 September. That timing is single-sourced. The agency spent the year tightening event-contract self-certifications, and Kalshi kept filing through it, including a plan to seek clearance for 60 single-stock perpetuals. What no filing shows is how much of September's $52.98 billion the pools paid for. Kalshi has not published that split, and once the program closes on 13 October there is no new data left to work it out from.