Kalshi has filed plans to end its Volume Incentive Program, with the termination taking effect no earlier than October 13. The move comes as the exchange faces questions about billions of dollars in repeated Ether perpetual futures trades.
According to a September 28 filing with the Commodity Futures Trading Commission, KalshiEX plans to terminate the program, which rewards eligible traders based on their share of qualifying trading activity.
The filing does not explain why Kalshi is ending the program and does not link the decision to recent concerns about its crypto trading volume.
The timing comes during a record month for the exchange. Kalshi recorded $52.98 billion in trading volume through September 29, already above the $38.67 billion recorded in August.
The Volume Incentive Program was originally filed with the CFTC in 2023. It was designed to increase trading activity and liquidity on Kalshi’s order book by rewarding eligible participants.
Under the program, traders receive part of a fixed reward pool based on their qualifying trading volume. Individual reward periods can last up to 31 days, while Kalshi can remove participants if its chief regulatory officer determines that their activity is abusive or inconsistent with the program.
The CFTC database also shows that Kalshi filed a separate Deposit and Trading Reward Incentive Program on September 25. That means ending the older Volume Incentive Program does not necessarily mean the exchange is removing all of its trading incentives.
Questions about Kalshi’s crypto trading volume began before the latest filing.
Traders had raised concerns about large volumes of Ether perpetual futures compared with the relatively small amount of open interest. Later, The Wall Street Journal reported that the CFTC was examining repeated Ether perpetual trades, many involving nearly identical transactions of around $5,500.
According to the report, more than $5 billion in volume came from these repeated trades over roughly a month. The report described the situation as a regulatory review and did not say that the CFTC had opened a formal enforcement case.
Kalshi has rejected claims that the activity represents wash trading.
The company said the trades involved genuine buyers and sellers taking opposite sides of transactions. It also said hundreds of traders were interacting with a market maker that was posting orders on the platform.
Kalshi said its system prevents users from matching their own orders and that coordinated wash trading is prohibited and monitored.
The company also made a distinction between its general volume rewards and the liquidity programs used for perpetual futures.
According to Kalshi, perpetual market makers are generally rewarded for maintaining orders of certain sizes within specific bid-ask spreads for a required period. These programs are designed to provide liquidity rather than reward the amount of trading that happens against those orders.
Because of that distinction, the September 28 filing does not by itself show that Kalshi has ended the liquidity arrangements connected to the Ether trading activity under scrutiny.
Kalshi has continued expanding its crypto perpetual futures products. In September, it added contracts for BNB, Cardano, Worldcoin, Aave and Venice Token, expanding its lineup beyond Bitcoin and other previously available cryptocurrencies.
Despite the questions surrounding some of its crypto volume, Kalshi’s overall trading activity has continued to grow. Its September volume through September 29 was already about 37% higher than August’s total.
The exchange is also attracting more investor interest. Reuters reported that Kalshi was in talks to raise around $1 billion at a valuation of roughly $40 billion.
The reported financing discussions could give Kalshi a valuation significantly above the $22 billion level from its previous funding round in May. However, the latest deal remains under negotiation and the final terms could still change.
Kalshi’s rapid growth shows how quickly prediction markets and related financial products are expanding in the US. At the same time, the questions surrounding its Ether perpetual trading activity have placed greater attention on how that volume is generated and how such markets are monitored.
