Kalshi Denies CFTC Probe Into Trading Activity

Prediction market platform Kalshi issued a statement saying it has not received any notice from the U.S. Commodity Futures Trading Commission (CFTC) and does not believe regulators have launched a formal investigation into its business. This follows a Wall Street Journal report that the CFTC is reviewing Kalshi's trading data to determine whether to take enforcement action, though the agency declined to confirm whether any investigation exists. The controversy stems from anomalous trading patterns identified on the platform.

Beni, co-founder of research firm Stealth Neolab, noted that across four trading days in September, trades of exactly $5,500 accounted for 48% to 58% of the notional volume in Ether contracts. Additional data shows the platform's Ether market saw nearly one million trades of highly uniform size, raising market concerns over trading compliance. In response to these anomalies, Kalshi spokesperson Elisabeth Diana attributed them to the platform's liquidity incentive program. The company explained that the program promotes trading activity by rewarding participants who provide liquidity to the market, and that the resulting data patterns are a common phenomenon in financial markets.

[TechFlow]