Kalshi has filed to terminate a trading reward program from Oct. 13 at the earliest while questions continue over billions of dollars in repeated Ether perpetual futures trades on its platform.
Summary
- Kalshi plans to end its volume incentive program no earlier than October 13, filing shows.
- September volume reached $52.98 billion by Sept. 29, topping August’s $38.67 billion total, data shows.
- More than $5 billion in similar Ether perpetual trades drew regulatory scrutiny, according to reports.
- Kalshi denies wash trading and says repeated prints came from market makers and faster traders.
- Reuters reports Kalshi is discussing a $1 billion raise at a roughly $40 billion valuation.
A Sept. 28 Commodity Futures Trading Commission filing states that KalshiEX intends to terminate its Volume Incentive Program, which rewards eligible traders according to their share of qualifying trading activity. The document does not give a reason for ending the program or connect the decision to recent allegations involving the exchange’s perpetual futures volume.
The termination comes during a record month for Kalshi. Data cited by The Block put September trading volume at $52.98 billion through Sept. 29, already above August’s $38.67 billion total. August itself followed a July period in which Kalshi generated roughly $37.7 billion of the $50.6 billion recorded across Kalshi, Polymarket and Polymarket U.S.
Kalshi’s volume program can end from Oct. 13
Kalshi originally filed the Volume Incentive Program with the CFTC in February 2023 and expected it to take effect on March 1 that year. At the time, the exchange said the program was intended to increase trading volume and liquidity on its central limit order book while encouraging participation from members.
Under the latest terms, eligible traders receive a portion of a fixed reward pool based on their share of qualifying completed volume in a market. Trades generally need to occur between $0.03 and $0.97, although the filing specifically says the price range does not apply to perpetual futures. Eligible volume can be limited to maker-side or taker-side transactions when disclosed on the relevant market page.
Kalshi’s filing says each reward period can run for no more than 31 days. Event-contract rewards are capped at $0.005 per contract for each participant, while Kalshi can remove a trader from the program if its chief regulatory officer determines the activity is abusive or inconsistent with the program’s purpose.
The CFTC database separately lists a Deposit and Trading Reward Incentive Program filed by Kalshi on Sept. 25 and placed under a 10-day review. Ending the older Volume Incentive Program therefore does not mean Kalshi is eliminating every trading incentive listed with the regulator.
Ether trades drew scrutiny before the filing
Questions about Kalshi’s crypto volume emerged before the termination filing. Earlier reporting on Kalshi’s crypto-volume wash-trading allegations detailed claims from trader Beni, who pointed to roughly $538.6 million in 24-hour ETH perpetual volume compared with approximately $3.1 million in open interest.
The Wall Street Journal later reported that the CFTC was examining trading patterns involving nearly identical Ether perpetual transactions, many close to $5,500 each. More than $5 billion in volume had accumulated from the repeated trade sizes over roughly a month, according to the report. The Journal described the regulator’s activity as a review and did not report that a formal enforcement investigation had been opened.
Kalshi disputes the wash-trading allegations. In a Sept. 22 response, the company said the identified transactions involved traders who genuinely wanted opposite sides of the trades, with hundreds of takers interacting with a market maker posting resting quotes. Kalshi said self-matching is mechanically blocked and coordinated wash trading is prohibited and monitored.
Perpetual liquidity rewards are a separate issue
Kalshi’s response draws an important distinction between volume rewards and the liquidity-provider incentives used in its perpetual futures markets.
The company explained that its perpetual market-maker programs generally pay participants for keeping bid and ask orders of specified sizes within defined spreads for a required period. Kalshi said those arrangements reward resting liquidity, not the amount of trading that ultimately occurs against the quotes.
As a result, the Sept. 28 filing ending the Volume Incentive Program should not be read by itself as confirmation that Kalshi has terminated the specific liquidity arrangements it cited when responding to the disputed Ether transactions. The filing concerns the separately named Volume Incentive Program and does not state that recent scrutiny triggered its termination.
Kalshi has rapidly expanded perpetual futures this year. In September, it added five crypto contracts covering BNB, Cardano, Worldcoin, Aave and Venice Token, bringing its crypto perpetual offering to Bitcoin and 17 altcoins at the time. The expansion of Kalshi’s U.S. crypto perpetual lineup followed an earlier period when perpetual futures volume crossed $5.5 billion within two weeks of launch.
Kalshi volume and valuation continue climbing
Kalshi’s September activity has continued to rise despite the dispute surrounding its crypto trading figures. The $52.98 billion recorded through Sept. 29 was already roughly 37% above August’s $38.67 billion, although September’s figure remained incomplete at the time of the data snapshot.
For comparison, Kalshi generated $37.7 billion in July when combined prediction-market volume across Kalshi, Polymarket and Polymarket U.S. reached a then-record $50.59 billion. Kalshi supplied roughly three-quarters of that total.
Investor interest has increased alongside trading activity. Reuters reported on Sept. 29 that Kalshi was in advanced negotiations to raise approximately $1 billion at a valuation near $40 billion. Sequoia Capital and Wellington Management were discussing leading the financing, while Tiger Global and Dragoneer were among potential participants, according to people familiar with the talks.
A completed deal at that level would follow Kalshi’s previous $22 billion valuation from a May 2026 financing. The latest reported talks for a $40 billion Kalshi valuation remain negotiations, and Reuters noted that final terms could still change.
ARK Invest has meanwhile gained direct exposure to the privately held company through ARKK, ARKW and ARKF. Holdings data tracked in September showed Kalshi positions across all three funds, while ARK has publicly estimated that prediction markets could eventually generate between $1 trillion and $5 trillion in annual trading volume.
