Kalshi has notified the Commodity Futures Trading Commission (CFTC) that it will shut down its Volume Incentive Program no earlier than October 13, while the agency reviews more than $5 billion in near-identical ether perpetual trades executed on the exchange.

What Kalshi is shutting down

In a filing dated September 28, Kalshi told the U.S. Commodity Futures Trading Commission that it plans to close the Volume Incentive Program on or after October 13. The program pays eligible traders out of a fixed reward pool based on their share of qualifying volume in a given market.

Kalshi first registered the incentive program with the CFTC in February 2023, and it began operating the following March. The platform described the program as a way to lift trading activity and liquidity on its central limit order book. The filing does not give a reason for the shutdown.

Under the program's terms, rewards applied only to trades priced between $0.03 and $0.97 and did not apply to perpetual futures — a type of derivative contract with no set expiration date. That exclusion is a key detail for the timeline: perpetual futures are the exact product category now at the center of the CFTC's review, so the program being shut down never paid rewards on the trading activity under examination.

Reward periods lasted 31 days, and event-contract payouts were capped at half a cent per contract per participant.

Ending this program will not clear out every incentive Kalshi has on file. The CFTC database separately lists a Deposit and Trading Reward Incentive Program that the company submitted on September 25, which is currently going through a 10-day review. The outcome of that review window, along with any public movement in the agency's reported examination of the ether trades, is the next development to watch.

Why the trading activity raised questions

A CoinDesk review of Kalshi's public trade records, published September 22, found that a small cluster of repeating trade sizes drove more than half the value on the platform's bitcoin and ether perpetual markets.

On ether, trades within $2 of $5,499 accounted for $7.7 million, or 57%, of the $13.5 million CoinDesk sampled between September 17 and September 20. Bitcoin showed a similar pattern, with recurring $2,500 and $5,000 trades making up 54% of the sampled activity. CoinDesk reported that the trades may have been placed by bots submitting orders of the same size over and over; the pattern appeared in 43 of 46 hourly samples dating back to June 19.

A pseudonymous analyst known as Beni, a co-founder of the research firm Stealth Neolab, was the first to flag the pattern, citing about $539 million in 24-hour ether-perpetual volume against roughly $3.1 million in open interest. The two metrics measure different things: volume counts every trade executed in a period, while open interest tracks the contracts that remain open, so volume running far ahead of open interest reflects the same positions changing hands many times rather than a large base of standing positions.

The CFTC was later reported to be examining the trades, with a Wall Street Journal report noting that more than $5 billion in ether-perpetual volume was tied to the repeated sizes over roughly a month.

Kalshi rejected the wash-trading claims outright in a September 22 blog post, writing that "wash trading does not occur on Kalshi." Wash trading, as the term is used in U.S. derivatives markets, refers to trades that create the appearance of activity without any change in beneficial ownership or genuine market exposure — a practice prohibited in U.S. derivatives markets. The company said self-matching is mechanically blocked and that coordinated wash trading is banned and surveilled. It attributed the repeated patterns to its market-maker arrangements, under which firms are paid a flat fee to keep resting bid and ask orders on the book, and faster traders repeatedly hit those quotes.

Elisabeth Diana, a spokesperson for Kalshi, said as of September 23 that the CFTC had not contacted the company. She added that Kalshi did not believe a formal examination was open and that this kind of pattern is normal in programs that pay for liquidity.

The scrutiny comes amid a wider industry backdrop: a Columbia University study last year estimated that nearly 25% of Polymarket's volume over the prior three years was wash trading, though Polymarket was not accused of complicity in that case.

Record volume and a possible $40 billion valuation

Despite the allegations, September has been Kalshi's biggest month on record. The Block's data dashboard put volume at $52.98 billion through September 29 — an all-time high that already exceeds the $38.67 billion recorded in August, even though September is not yet over. In July, Kalshi supplied roughly $37.7 billion of the $50.6 billion logged across Kalshi, Polymarket and Polymarket U.S. — about three-quarters of the combined total across the three venues.

Kalshi is also in advanced talks to raise about $1 billion at a valuation near $40 billion, with Sequoia Capital and Wellington Management weighing the lead and Tiger Global and Dragoneer possible participants. Such a deal would roughly double the $22 billion valuation the company carried after its May 2026 funding round. Separately, Cathie Wood's Ark Invest said it now holds Kalshi exposure across its ARKK, ARKW and ARKF funds.