WSJ: U.S. CFTC probes Kalshi over "wash trading"; Kalshi denies fictitious trading

According to a Wall Street Journal report, a source familiar with the matter disclosed that the U.S. Commodity Futures Trading Commission (CFTC) is investigating prediction market Kalshi for wash trading. Earlier allegations claimed that since August, Kalshi traders have executed nearly 1 million trades in the Ethereum futures market, each for nearly identical amounts. This unusual activity has caught the attention of federal regulators and market participants. In a blog post, Kalshi asserted that no fake trades occur on its platform, noting that recurring quotes are fixed prices posted by market makers, which faster traders take advantage of. Kalshi co-founder Luana Lopes Lara told The Wall Street Journal in an interview that it is not unusual for exchanges to attract large traders to new markets to boost broader adoption. "Any market trying to launch new products and new businesses will go through this process," she said. "It’s very normal."