Kalshi denies CFTC investigation amid scrutiny of ether perpetual futures trading patterns

Kalshi, the CFTC-regulated prediction market that muscled its way into crypto derivatives, is pushing back against suggestions that federal regulators are investigating its ether perpetual futures trading. The company says it hasn’t heard from the CFTC, and that the trading patterns drawing attention are exactly what healthy market-making looks like.

The numbers raising eyebrows

The Wall Street Journal reported that Kalshi’s ether perpetual futures market has seen nearly one million trades clustered around identical sizes, roughly $5,500 in notional value each. Those trades accumulated over $5B in volume within a single month.

The volume-to-open-interest ratio in Kalshi’s ether perpetual market has reached as high as 174x. To put that in context, a ratio that high means the dollar amount changing hands dwarfs the actual positions being held. Think of it like a restaurant where 174 people walk through the revolving door for every one person who actually sits down to eat.

In traditional futures markets, elevated volume-to-open-interest ratios can signal legitimate high-frequency market-making. They can also signal wash trading, where a participant buys and sells the same asset to inflate volume artificially.

Kalshi’s defense

Kalshi spokesperson Elisabeth Diana offered a direct rebuttal to the speculation.

“We have not been contacted by the CFTC and don’t believe there is any formal examination.”

The company argues that its systems block self-trades and actively monitor for coordinated activity. Kalshi also pointed to its track record of cooperating with regulators. The firm has referred dozens of insider-trading cases to the CFTC and has enforced penalties in past incidents, including cases tied to its political prediction contracts in 2025.

From prediction markets to crypto derivatives

Kalshi built its reputation as a prediction market, letting users place bets on everything from Federal Reserve rate decisions to weather events to election outcomes. The CFTC initially attempted to block Kalshi’s political event contracts before a federal court ruled in the company’s favor.

The expansion into cryptocurrency perpetual futures represents a strategic pivot into a much larger, much more competitive market. Perpetual futures, contracts with no expiration date that track an underlying asset’s price, are the dominant trading instrument in crypto. Kalshi’s entry as a US-regulated alternative was notable precisely because it offered a compliant onshore option.

What to watch

No formal enforcement action has been announced. The CFTC has not publicly confirmed or denied any examination of Kalshi’s trading activity.

Kalshi has the regulatory infrastructure of a designated contract market, which subjects it to CFTC oversight that offshore venues simply don’t face. Whether that oversight framework catches a problem or validates Kalshi’s defense will determine whether this episode becomes a footnote or a turning point.