CFTC Scrutinizes Kalshi’s Ether Perpetual Trades
- The CFTC is reviewing trades on Kalshi’s ether perpetual market, where trades around $5,425 represented about 70% of the notional volume in a single day.
- Kalshi reported nearly one million similar-sized trades since August, with over one-third clustering at approximately $5,500.
- In a recent analysis, over 54% of trades and 68% of the value fell within a narrow price band, indicating fixed resting orders by market makers.
- Kalshi asserts that self-trading is blocked and wash trading is prohibited and monitored on their platform.
- Jump Trading and Wintermute were identified as key firms involved in these rapid trades.
The CFTC is evaluating whether to open an investigation into Kalshi’s ether perpetual trading patterns due to high volumes of near-identical trades. Market makers’ fixed resting orders are cited as the reason for these patterns rather than wash trading activities.
Kalshi has maintained that its trading activities are standard practice and involve numerous distinct traders, despite scrutiny from regulatory bodies over the significant volume turnover relative to open interest figures.(Source)
