TLDR
- An analyst flagged $539 million in 24-hour Ethereum perpetual volume on Kalshi against just $3.1 million in open interest.
- Kalshi’s crypto lead IcoBeast disputed the claims, saying one cited chart measured prediction market activity, not perpetual futures.
- Prediction markets recorded $7.64 billion in weekend volume on Sept. 19-20, up 20% from the prior weekend.
- Missouri’s attorney general sent cease-and-desist letters to six operators, including Kalshi, Polymarket and Robinhood.
- Senate Banking Republicans will hold a prediction market roundtable this week with Kalshi taking part.
Kalshi is facing questions about its reported crypto trading volume. A quantitative analyst claims some activity on its new cryptocurrency perpetual futures may be artificially inflated.
The analyst, known as Beni, is co-founder of Stealth Neolab. He pointed on X to about $539 million in 24-hour Ethereum perpetual volume, compared with just $3.1 million in open interest.
Open interest is the value of positions still outstanding. The figures put daily volume at roughly 174 times open interest.
Beni also found a repeating trade size of about $5,500. He said it made up 48% to 58% of Ethereum perpetual volume across four separate days.
Kalshi Disputes the Claims
Beni pointed to a Kalshi incentive program filed with the Commodity Futures Trading Commission. It offers reduced fees and rebates to eligible traders, which he argued could make fake trading cheaper.
However, the program specifically excludes suspected self-matching, wash trading and other abusive practices from rebates.
Kalshi crypto lead IcoBeast rejected the allegations. He said one chart Beni cited measured prediction market activity, not perpetual futures volume. He also denied that Kalshi handpicks which firms can become Self-Clearing Members.
Data firm TickerTracker found another unusual pattern after reviewing 221 million trades across 4,562 Kalshi markets. In a market on whether Zohran Mamdani will be the 2028 Democratic presidential nominee, an automated system buying at 0.2 cents and selling at 0.1 cents made up 67% of September volume through Sept. 20.
TickerTracker said public data alone cannot prove wash trading. It does not show who owns both sides of the trades or why they were made.
Record Weekend and Growing Regulatory Pressure
The claims come as prediction markets posted record weekend activity. Eight exchanges tracked by TickerTracker generated $7.64 billion in notional volume on Sept. 19-20, up 20% from $6.34 billion the weekend before.
Kalshi accounted for $5.83 billion, while Polymarket U.S. generated just over $1.03 billion. Parlays made up $4.49 billion, or 58.8% of the total. Football accounted for $1.45 billion.
These figures count contracts at their $1 face value, not the cash actually spent. Low-priced contracts can therefore produce much more reported volume than the money committed.
In Missouri, Attorney General Catherine Hanaway sent cease-and-desist letters to six operators. They include Kalshi, Polymarket, Crypto.com, Novig, Underdog and Robinhood.
Her office says the contracts are unlicensed sports wagering under state law. It says operators must get licenses from the Missouri Gaming Commission, though Hanaway has said she is open to a settlement.
Overseas, Polymarket is lobbying European and U.K. regulators to treat prediction markets as financial products, according to the Financial Times. Gambling regulators in the U.K., France, Germany and Italy have said local gambling licenses would be required. The European Securities and Markets Authority recently warned the sector was “rife with insider trading.”
In Washington, the Senate Banking Committee will hold a Republican-only prediction market roundtable this week. Punchbowl News reported that the talks will focus on securities-based prediction markets and that Kalshi representatives will take part.
A full agenda and participant list have not been released.
