Kalshi Faces Fake Volume Claims Over Repeated $5,500 Crypto Trades

Kalshi is facing scrutiny over trading activity in its newly launched ether perpetual futures after a trader on X accused the prediction market platform of artificially boosting volumes.

The dispute centers on how trading activity should be interpreted, particularly the relationship between reported volume and open interest. IcoBeast.eth, who works on product development at Kalshi, pushed back against the allegations, arguing that the criticism overlooks how the platform measures and reports activity.

CoinDesk contacted Kalshi for additional comment but had not received an immediate response.

The Allegations

The controversy began when Beni, a quantitative analyst and co-founder of Stealth Neolab who uses the name Beni on X, highlighted what he described as an unusual gap in Kalshi’s ether perpetual contract, ETH-PERP.

According to Beni, the contract recorded $539 million in 24-hour trading volume while its open interest stood at only $3.1 million. That means reported volume was roughly 174 times the value of outstanding positions.

Beni argued that such a large difference can be associated with wash trading, in which repeated buying and selling artificially increases reported activity without creating a comparable amount of open market exposure.

Open interest measures the total value of active contracts that remain outstanding, while trading volume measures the value of contracts traded during a particular period.

Beni also pointed to a recurring pattern involving $5,500 trades. He claimed these trades represented as much as 58% of Kalshi’s total ether perpetual volume on four different days, describing the pattern as evidence of potential volume manipulation.

Another part of his argument focused on a rebate structure filed with the Commodity Futures Trading Commission. According to Beni, certain Self-Clearing Members could effectively face zero net trading costs through a 0.3-basis-point maker rebate offsetting a 0.3-basis-point taker fee.

His reasoning was that lower trading costs could potentially create an incentive for participants to generate additional activity, including trades with themselves.

Rebates are incentives used by trading venues to encourage market makers to provide liquidity. They can take the form of fee reductions, refunds or other payments tied to trading activity.

Kalshi’s Response

IcoBeast.eth initially dismissed the wash-trading concerns, arguing that Kalshi’s fee structure would make such activity unattractive. As the discussion gained attention on X, he provided a more detailed response addressing the claims.

He first identified what he said was an important error in Beni’s original analysis. According to IcoBeast.eth, the Artemis chart referenced in the criticism was measuring prediction-market share rather than volume generated by perpetual contracts.

He also explained why Kalshi’s reported volume figures can appear significantly larger than the amount of money traders initially commit.

Kalshi uses the same volume-reporting convention as Polymarket, according to IcoBeast.eth, with volume based on the maximum potential payout of event contracts rather than the amount of cash initially spent.

For example, a trader purchasing 100,000 contracts at 30 cents each would spend $30,000. Because each contract pays $1 to the winning side, however, the reported volume would be $100,000, reflecting the contracts’ maximum payout value.

This methodology can make headline volume appear substantially larger than the cash committed by traders, but Kalshi argues that the figure reflects genuine trading demand rather than fabricated activity.

IcoBeast.eth also rejected the suggestion that Kalshi selectively chooses a small group of Self-Clearing Members to participate in its perpetual markets.

He pointed to CFTC rules requiring regulated venues to provide fair access, meaning firms that satisfy the necessary regulatory, capital and operational requirements can qualify for Self-Clearing Member status.

“Anyone can become a Self-Clearing Member of a CFTC regulated exchange as long as they meet the regulatory requirements,” IcoBeast.eth said, adding that fair access is a regulatory requirement for Kalshi.

He further clarified that Kalshi does not provide rebates for its crypto event prediction contracts.

While rebate programs are widely used by large trading venues, including CME Group, Hyperliquid and Binance, IcoBeast.eth said Kalshi operates under a different transparency framework because it is regulated as a Designated Contract Market.

As a result, Kalshi is required to publicly file its incentive programs with the CFTC rather than negotiating such arrangements privately.

IcoBeast.eth acknowledged that Kalshi’s U.S. perpetual futures offering remains in its early stages. He said the company is building a new product in a relatively untested U.S. market but argued that its regulatory framework provides greater visibility into how incentives are structured.

He contrasted Kalshi’s public filing requirements with offshore perpetual exchanges, saying that users can see the incentive programs because the company is required to disclose them to regulators.

The dispute therefore remains centered on two different interpretations of Kalshi’s trading data: Beni argues that the unusually high volume relative to open interest and repeated $5,500 trades warrant scrutiny, while Kalshi’s response points to its volume methodology, market structure and regulatory disclosure requirements.

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