Kalshi Terminates Trader Incentive Program Amid CFTC Ether Futures Review

Key Takeaways

• Kalshi submitted a CFTC notice to terminate its Volume Incentive Program effective no sooner than Oct. 13.
• The platform recorded $52.98 billion in trading volume for September through the 29th, setting a new record.
• The CFTC is reportedly examining over $5 billion in recurring Ether perpetual futures transactions.
• Kalshi refutes wash trading claims, attributing the pattern to market maker quotes being executed by high-frequency traders.
• The company is reportedly pursuing a $1 billion fundraise at a $40 billion valuation.

Kalshi has notified the Commodity Futures Trading Commission of its intention to discontinue its Volume Incentive Program. According to the regulatory filing, the termination will take effect no sooner than Oct. 13.

Launched in March 2023, the incentive initiative distributed rewards to participants based on their order book trading activity on Kalshi’s platform.

The regulatory submission does not specify why Kalshi is ending the program. Additionally, the company made no connection between this decision and recent inquiries regarding its trading metrics.

September delivers unprecedented trading activity

Trading volume on Kalshi reached $52.98 billion in September, according to figures compiled through Sept. 29. This surpassed August’s $38.67 billion total.

Though the September data was incomplete when reported, it already represented a platform record.

July saw approximately $37.7 billion in Kalshi volume. When combined with Polymarket and Polymarket US that month, total volume across these platforms hit $50.6 billion.

Regulatory scrutiny over Ether perpetual contracts

Prior to the regulatory filing, a trader identified as Beni highlighted unusual activity on social media. The trader noted approximately $539 million in 24-hour trading volume for Kalshi’s Ether perpetual futures.

This stood in stark contrast to the contract’s $3.1 million open interest. The discrepancy sparked questions about the legitimacy of the trading activity.

The Wall Street Journal subsequently reported the CFTC was examining the situation. According to the report, numerous trades clustered around $5,500 in size, totaling over $5 billion in volume across roughly one month.

The publication characterized the CFTC’s action as a review rather than a formal investigation. Kalshi maintains it has not been contacted by the CFTC regarding this matter.

In a blog post published last week, Kalshi addressed the wash trading accusations. The platform categorically denied any wash trading occurs on its system.

According to Kalshi, the repetitive trade sizes result from market makers maintaining consistent quotes. High-frequency traders then execute against these quotes, producing the pattern of uniform transaction sizes.

The company emphasized that its infrastructure prevents traders from executing against their own orders. It noted that coordinated wash trading violates platform rules and undergoes active monitoring.

Kalshi distinguished between the discontinued Volume Incentive Program and its perpetual futures market maker programs. The latter compensate participants for maintaining open orders at specified prices, not for executed trade volume.

Consequently, terminating the Volume Incentive Program leaves perpetual futures incentives intact. The CFTC filing exclusively references the Volume Incentive Program.

A separate regulatory submission reveals Kalshi filed a new Deposit and Trading Reward Incentive Program on Sept. 25. This filing is currently undergoing the CFTC’s 10-day review period.

Crypto contract expansion and capital raising efforts

Throughout September, Kalshi broadened its cryptocurrency contract offerings. The platform introduced perpetual futures for BNB, Cardano, Worldcoin, Aave, and Venice Token.

This expansion brought Kalshi’s crypto perpetual portfolio to Bitcoin plus 17 additional tokens. The move followed strong initial performance where crypto perpetual futures volume exceeded $5.5 billion within the first two weeks of availability.

On Sept. 29, Reuters reported that Kalshi is negotiating to raise approximately $1 billion. The funding round would reportedly value the company near $40 billion.

Sequoia Capital and Wellington Management were identified as potential lead investors. Tiger Global and Dragoneer were also mentioned as prospective participants.

This would represent a significant increase from Kalshi’s previous $22 billion valuation established in a May 2026 funding round. Reuters cautioned that deal terms remain subject to change before finalization.

Ark Invest has also revealed new Kalshi exposure. The investment firm confirmed that its ARKK, ARKW, and ARKF funds have established positions connected to the company.

Ark projects that prediction markets could ultimately generate between $1 trillion and $5 trillion in annual trading volume.