Kalshi is ending its volume rewards a year early. What the numbers say.
What the program actually paid
The Volume Incentive Program was filed with the CFTC in February 2023 and went live in March 2023, long before sports contracts or perpetual futures existed on Kalshi. The mechanics were simple. Each term, which could run up to 31 days, Kalshi set a fixed prize pool. At the end of the term the pool was divided among eligible traders in proportion to their share of eligible volume on the central limit order book.
For event contracts, the ordinary yes-or-no markets, there were two guardrails. Only trades priced between 3 and 97 cents counted, which stopped people farming volume on contracts that were already effectively settled. And the reward was capped at half a cent per contract per participant, so the payout could never exceed a few percent of the money at risk.
Perpetual futures were added to the venue in 2026 and, per the terms reported by Legal Sports Report and Unchained, the 3 to 97 cent band did not apply to them. Signed market makers, affiliates, introducing brokers and futures commission merchants were excluded. Kalshi has since stressed that its perpetuals programs "do not reward volume traded", and that the ether activity in question traced to a separate market maker arrangement built on fee waivers and stipends.
The pattern the Journal found
| Measure | Figure | Source |
|---|---|---|
| Near-identical trades in one ether perp market since August | ~1,000,000 | WSJ, 23 Sep |
| Typical trade size | ~$5,500 | WSJ, 23 Sep |
| Volume from those trades, one month | >$5 billion | WSJ, 23 Sep |
| Share of the market's volume, 17 to 20 Sep sample | >1/3 | WSJ, 23 Sep |
| Peak daily share of ether perp volume | up to 58%, four days | Analyst "Beni", Stealth Neolab |
| One day flagged: 24h volume vs open interest | $539M vs $3.1M | @beniduboss, via The Block |
| Kalshi monthly volume, September (to 29 Sep) | $52.98 billion | The Block |
| Kalshi monthly volume, August | $38.67 billion | The Block |
The last of those rows is the one to sit with. A day on which a market prints $539 million of volume against $3.1 million of open interest has turned over its entire book roughly 174 times in 24 hours. When we measured turnover across 234 perpetual markets on a different venue last week, the busiest market in the top ten turned over 1.35 times its open interest in a day. The ether perp on Kalshi was running at more than a hundred times that pace, with positions that opened and closed so fast almost none of them were still there at the end of the day.
The Journal reported that the CFTC was examining the activity to decide whether an enforcement investigation was warranted, and that two firms, Jump Trading and Wintermute, were among the participants. Jump said it uses self-match prevention tools and does not coordinate trades. Kalshi described the activity as legitimate, said it involved hundreds of distinct traders, and later said it had not been contacted by the CFTC about it.
Market making or wash trading: how to tell the difference
Wash trading has a precise meaning: the same beneficial owner, or parties acting in concert, on both sides of a trade, so that volume appears without any transfer of risk. It is banned under the Commodity Exchange Act and, as Kalshi points out, in its own rulebook. Identical trade sizes on their own do not establish it. A market maker that rests a fixed $5,500 quote on each side and refreshes it the instant it is hit will print thousands of trades of exactly that size against whoever takes them. If the takers are many different accounts, that is liquidity provision working as designed, even if it looks mechanical on a tape. That is Kalshi's explanation and it is a coherent one.
What a pattern like this cannot do is tell you anything about depth. Five billion dollars of volume in a market with three million of open interest means the money was passing through, not staying. For anyone using reported volume to judge how much they could trade without moving the price, the honest answer from this market was: far less than the headline suggests. That is true whether or not a single trade was improper.
The regulator had already signalled interest in the mechanics. On 12 August the CFTC's Division of Market Oversight issued Staff Letter 26-23, an advisory on how exchanges self-certify market-maker, liquidity and incentive programs, noting an increasing number of such filings, particularly for event contracts, with procedural and substantive deficiencies. Kalshi's withdrawal notice landed six weeks later.
What the filing does and does not say
The self-certification, filed on 28 September according to Legal Sports Report and reported widely on 30 September, states only that the program will end no earlier than 13 October 2026 and that the exchange may terminate incentive programs "as the Exchange determines in its sole discretion". There is no stated reason. The program it ends was, by its own terms, scheduled to run until 1 October 2027.
Three things are worth separating. First, the program being withdrawn is the event-contract volume scheme, with its 3 to 97 cent band and half-cent cap. Second, the ether perp activity under review was, on Kalshi's account, driven by a separate market-maker arrangement. Third, the regulator's August advisory was about filings in general, not about Kalshi specifically. Reporting has tended to collapse these into one story. They are three adjacent facts, and the connection between them is timing, which is suggestive but not evidence.
What is not in dispute is the scale of what the program sat on top of. Kalshi's September volume of $52.98 billion was 37 percent above August and the largest month in its history. CNBC's reporting on 30 September put the question plainly: when growth is that fast, how much of the number reflects risk actually changing hands? Polymarket, which has no comparable CFTC filing to withdraw, faced the same question over trading in some of its low-probability contracts. A Columbia University study last year had already estimated that around a quarter of Polymarket's three-year volume may have been wash trades, while stopping short of accusing the platform of involvement.
How to read a prediction market volume number after this
Check open interest next to it. Volume divided by open interest is turnover. On a contract where that ratio is in the single digits, most of the volume represents positions someone is carrying. In the hundreds, it mostly represents positions nobody kept. Our funding rate and open interest captures both show how wide the range is across a single venue.
Separate the allegation from the measurement. Whether anyone broke a rule is for the CFTC, and nothing public so far settles it. Whether a $5 billion number told you much about the depth of a $3 million market is a question you can answer yourself, and the answer was no.
Method and limits
Every figure on this page comes from published reporting and regulatory documents, cited inline and listed below. We have not independently captured Kalshi's ether perpetual order flow, and we have not seen the full text of the 28 September self-certification beyond the passages quoted by the outlets that obtained it. Trade counts, sizes and volume shares are the Wall Street Journal's; the single-day volume and open interest figure is the analyst's own and we could not verify it against venue data. Monthly totals are as reported by The Block through 29 September and may be revised.
Limits. The program terms described are those reported from the original 2023 filing and may have been amended since. The CFTC has not confirmed any investigation, and nothing here should be read as a finding that any participant engaged in wash trading. We will update this page if the filing text or a regulatory statement becomes public.
Frequently asked questions
What was Kalshi's Volume Incentive Program?
A rewards scheme filed with the CFTC in February 2023 and launched in March 2023. Each term, up to 31 days, a fixed prize pool was split among eligible traders by share of eligible order-book volume. For event contracts only 3 to 97 cent trades counted, capped at half a cent per contract. Signed market makers, affiliates and brokers were excluded.
When does the program end?
No earlier than 13 October 2026, per Kalshi's filing. It had been scheduled to run until 1 October 2027.
What did the Wall Street Journal find?
Nearly one million trades of about $5,500 each in one ether perpetual market since August 2026, producing over $5 billion of volume in a month and more than a third of that market's volume in a 17 to 20 September sample. The CFTC was reported to be examining it without confirming an investigation.
Is repeated identical trade size proof of wash trading?
No. A fixed-size resting quote hit by many different takers prints identical sizes too. Kalshi says hundreds of distinct traders were involved and that wash trading is banned in its rulebook. Unusual and worth reviewing is not the same as proven abusive.
Does this affect Polymarket?
Not directly, since Polymarket has no CFTC incentive filing to withdraw. But the same reporting questioned some of its low-probability contract volume, and a Columbia study last year estimated around a quarter of its three-year volume may have been wash trades.
Sources
- Legal Sports Report, Volume rewards program on Kalshi set to end nearly a year early, 30 September 2026. Program terms, filing date, original end date.
- The Block, Kalshi to end liquidity incentive program amid wash trading allegations, 30 September 2026. Monthly volume figures, single-day volume and open interest, Kalshi statement.
- John Lothian News summary of the Wall Street Journal, $5 billion flurry of nearly identical Kalshi trades draws scrutiny, 23 September 2026. Trade counts, sample dates, named participants.
- Unchained, Kalshi ends its trader volume rewards a year early, 30 September 2026. Filing language, perpetuals treatment.
- CFTC, Release 9282-26 and Staff Letter 26-23, 12 August 2026. Advisory on self-certification of incentive programs.
- Yahoo Finance, Kalshi rejects wash trading claims, September 2026. Kalshi rulebook statement, Columbia study reference.
- CNBC, Kalshi, Polymarket trading volumes on some products raise questions amid massive growth, 30 September 2026.
- BetG8, where the money is positioned on a perp exchange, 24 September 2026, for the turnover comparison.
18+ only. Perpetual futures are leveraged instruments and can lose more than the margin posted. This page reports published figures and regulatory filings; it is not financial, investment, trading or legal advice, and it is not a recommendation to open, hold or close any position. If gambling or trading stops being fun, help is available at 1-800-GAMBLER.