Key Takeaways
- Kalshi submitted documentation to the CFTC announcing termination of its Volume Incentive Program effective no sooner than Oct. 13.
- The platform recorded $52.98 billion in trading activity during September through Sept. 29, establishing a new record.
- The CFTC is reportedly examining over $5 billion worth of repetitive Ether perpetual futures transactions.
- Kalshi rejects wash trading claims, attributing the activity to market makers and high-frequency traders executing against posted quotes.
- The company is purportedly negotiating a $1 billion funding round at a $40 billion enterprise value.
Kalshi has notified the Commodity Futures Trading Commission of its intention to terminate its Volume Incentive Program. According to the filing, the discontinuation will take effect no sooner than Oct. 13.
The initiative was originally launched in March 2023. Under the program, participants received portions of a reward pool proportional to their trading activity on Kalshi’s order book.
The regulatory submission does not specify the rationale behind terminating the program. Kalshi has not officially connected this decision to recent inquiries regarding its trading metrics.
September marks unprecedented trading activity
The platform processed $52.98 billion in trading volume during September, according to figures compiled through Sept. 29. This surpassed August’s total of $38.67 billion.
Since the September data was captured before month-end, the final tally was expected to be higher. Nonetheless, the preliminary figure already represented a platform record.
July saw approximately $37.7 billion in volume on Kalshi. When aggregated with Polymarket and Polymarket US, the three platforms collectively handled $50.6 billion that month.
Regulatory scrutiny of Ether perpetual contracts
Prior to the regulatory filing, a market participant known as Beni highlighted unusual patterns on social media. The trader noted approximately $539 million in 24-hour trading volume for Kalshi’s Ether perpetual futures contract.
This activity contrasted sharply with merely $3.1 million in open interest for the identical contract. The disparity prompted questions about the authenticity of the trading behavior.
The Wall Street Journal subsequently disclosed that the CFTC had begun examining the activity. According to the publication, numerous trades clustered around $5,500 in size and accumulated to over $5 billion in volume across roughly one month.
The Journal characterized the CFTC’s actions as a review rather than a formal enforcement investigation. Kalshi has stated it received no direct communication from the CFTC regarding this matter.
In response to these allegations, Kalshi published a detailed blog post last week. The platform firmly denied the occurrence of wash trading on its system.
According to Kalshi’s explanation, the repetitive trade sizes resulted from market makers maintaining consistent quote levels. High-frequency traders then executed against these quotes, generating the pattern of uniform transaction sizes.
The company emphasized that its infrastructure prevents users from executing trades against their own orders. It stated that coordinated wash trading violates platform policies and is actively monitored.
Kalshi distinguished between the terminated Volume Incentive Program and its ongoing perpetual futures market maker initiatives. The company clarified that these programs compensate participants for maintaining open orders at specified prices, rather than for executed trade volume.
Consequently, discontinuing the Volume Incentive Program does not affect Kalshi’s perpetual futures market-making incentives. The CFTC filing exclusively references the Volume Incentive Program.
Additional regulatory documents reveal that Kalshi filed a new Deposit and Trading Reward Incentive Program on Sept. 25. This submission is currently undergoing the CFTC’s standard 10-day review process.
Expansion of cryptocurrency products and fundraising efforts
Throughout September, Kalshi broadened its cryptocurrency contract offerings. The platform introduced perpetual futures for BNB, Cardano, Worldcoin, Aave, and Venice Token.
This expansion increased Kalshi’s crypto perpetual portfolio to Bitcoin and 17 additional digital assets. The growth followed strong initial performance, with crypto perpetual futures volume exceeding $5.5 billion within the first two weeks of availability.
Reuters disclosed on Sept. 29 that Kalshi is negotiating to secure approximately $1 billion in new capital. The report indicated the funding round would value the company near $40 billion.
Sequoia Capital and Wellington Management were identified as prospective lead investors. Tiger Global and Dragoneer were also mentioned as potential participants in the round.
If finalized, this valuation would represent a significant increase from Kalshi’s previous $22 billion valuation established during a May 2026 funding event. Reuters cautioned that deal terms remain subject to modification before completion.
Ark Invest recently revealed new Kalshi exposure. The investment firm announced that its ARKK, ARKW, and ARKF funds have established positions connected to the platform.
Ark has projected that prediction markets could ultimately generate between $1 trillion and $5 trillion in annual trading volume.
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