A wave of questioning sparked by a tweet.

Written by: Ma He, Foresight News

On September 21, a significant controversy arose around the trading data of Kalshi's perpetual contracts. The day before, Kalshi had applied to launch perpetual futures contracts linked to U.S. individual stocks.

The controversy started with the turnover rate of crypto perpetual contracts and subsequently extended to the company's main business—the statistical criteria for event contracts.

Both sides of the dispute are using public materials to speak. Those questioning data manipulation presented holdings, transactions, repeated hand counts, and CFTC reporting documents, arguing that the numbers do not align naturally with trading; Kalshi's crypto head emphasizes that predictive markets and perpetuals are two different products, and the incentive plan has been publicly reported to regulators, so calling the industry-standard nominal principal algorithm manipulation is unfounded.

The spark came from a tweet

On September 20, Kalshi's crypto head IcoBeast.eth shared a chart showing that Kalshi's crypto trading volume data accounted for 96.7% of the market with $363.9 million, far surpassing Polymarket's $12.3 million. However, users in the tweet's comment section questioned that most of it was just wash trading, to which IcoBears.eth quickly responded: Since the platform charges fees, who would wash trade?

Hours later, a user claiming to be a former quant and current co-founder of Stealth Neolab, Beni (@beniduboss), posted a lengthy message, centered around a hard statement: Kalshi is fabricating crypto trading volume, and he can prove it. The post subsequently received over 1.2 million views.

Later that same day, Beni posted again, stating: If Kalshi itself participates, instructs, or is aware of such incentivized behavior, it may constitute fraud or market manipulation; and said he has "very interesting materials that can be shown to the CFTC."

Beni's accusations are based not only on the trading ratio but also on the details of the rules. KalshiEX LLC submitted an update on the "Temporary Perpetual Fee Rebate Plan" to the CFTC on September 2, 2026, which indicated that the plan would not take effect before 9:00 AM ET on September 16 and would be valid until December 31, 2026, or until the company makes amendments or terminates it. In crypto perpetuals, eligible market taker rates can be rebated to 0.3 basis points, while makers may net 0.3 basis points, applicable to all self-clearing members (SCM). For both sides, trading costs can be compressed to nearly zero.

The same document also includes exclusion clauses: Those involved in wash trading, self-dealing, pre-arranged transactions, and other abusive behaviors are not eligible for rebates; if multiple incentives lead to a net negative fee rate, payments will be reduced; the chief regulatory officer may revoke participation eligibility and initiate disciplinary proceedings. In other words, the regulatory filings include designs to "reduce friction costs to extremely low levels" along with prohibitive language against using rebates for wash trading. The document demonstrates that the fee structure exists but cannot prove that rebates have reached wash trades.

Beni also presented specific perpetual instruments to elaborate on his suspicions.

Beni stated that Kalshi ETH-PERP currently has an open interest of about $3.1 million, yet the 24-hour trading volume reached $538.6 million, equivalent to an approximately 174 times turnover for all open positions daily, meaning an average turnover every 8 minutes and 18 seconds.

Beni also pointed out that Kalshi's holdings leaderboard showed the largest single holding in ETH-PERP was only about $17,600, which significantly differed from the aforementioned trading volume scale.

Additionally, Beni claimed that Kalshi had reached a liquidity-for-equity cooperation arrangement with Jump Trading, thus questioning the motivation behind related trades to boost platform trading volume indicators. Beni further questioned Kalshi's method of calculating trading volume, stating that the platform counts "the number of contracts traded" as volume, displaying it with a dollar sign in the interface, potentially leading users to misunderstand the actual trading amounts.

Kalshi responds: Predictive markets and crypto perpetuals are distinct

IcoBeast.eth quickly authored a response, not explaining the 174-fold turnover point by point, but changing the battlefield first. He stated that the Artemis chart that Beni initially referenced was for predictive market share, not for perpetual trading; Kalshi does not pay rebates for crypto predictive markets; the calculation methods for contract numbers and nominal amounts are consistent with predictive markets like Polymarket, making it a fair comparison.

In response to the claim that "SCM is Kalshi's designated market maker," he denied it, stating that in CFTC-regulated designated contract markets, anyone can become a self-clearing member as long as they meet regulatory requirements, asserting that "fair access" is itself a regulatory requirement. He acknowledged that perpetuals are still in their early stages and emphasized that CME, Hyperliquid, and Binance all sustain liquidity through rebates and incentives, with some platforms even offering negative market-making fees. The distinction between Kalshi and offshore venues is that incentive plans must be publicly reported.

This set of responses has two effects. One level is procedural correctness—predictive markets and perpetuals are indeed not the same products; according to Kalshi's glossary, the definition of volume for event contracts is "the number of contracts traded," while perpetuals involve margin, leverage, and funding costs. The other level is evasion—the community is genuinely focused on the ETH perpetual book: millions in positions, hundreds of millions in daily trading, the largest single position in the leaderboard being less than twenty thousand dollars, and the repeated appearance of fixed hand counts later identified. Cutting the product line does not explain why this order book appears this way.

Beni was not convinced, asserting that 99% of the perpetual transactions are fake and vowing to continue breaking down the predictive market.

The controversy extends to the main business: event contracts exaggerate data

Before the dispute over perpetuals could conclude, predictive market trader @retardmode tweeted to ignite the controversy around Kalshi's main business. He stated that approximately 61% of the reported trading volume from Kalshi comes from multi-event combination bets (parlays); users spend $1 to buy a parlay that pays $14.1 for hitting all, with the platform counting it as a $14.1 transaction per contract; nearly half of the parlays consist of long strings with 11 or more elements, with extremely low winning probabilities. By this measure, the true trading volume from the previous day was about $136 million, while the reported figure was $1.91 billion. He bluntly stated that this was misleading to investors.

Trader @CarOnPolymarket followed up with a sharp remark: "Kalshi counts a $1 bet on a 1000x parlay as $1000 in trading volume. Yesterday, their true trading volume was $136 million, while the reported volume was $1.91 billion. Over a month, that would mean $57 billion in fake trading volume against $4 billion in real trading volume; no wonder they are 'breaking records' every day."

This issue is not the same as the perpetual controversy. Predictive markets have long operated on the basis of a contract value of $1 for each contract, a practice that has been prevalent in the industry, and Polymarket also uses contract count to report.

The controversy lies in whether Kalshi's parlay ratio is too high, whether lengthy straights inflate the reported volume to a point of losing reference value, and whether using a dollar sign in the interface causes contract counts to appear as cash. Beni pointed out that the glossary states that volume equals the number of contracts traded, yet the interface displays a dollar sign next to the numbers—100 contracts at $0.30 per Yes, costing users $30, while the interface could display $100,000. This is an issue of display method, not a repeated hand count on the perpetual book. Blending these two lines into a single statement that Kalshi is entirely fraudulent would bind verifiable accounting disputes with unregulated allegations of wash trading.

Data from defirate shows that over the past 30 days, politics, sports, and crypto remain the three largest trading segments on Kalshi.

However, beneath the surface of the Twitter spat, Kalshi's current predicament is an absurd "compliance wash trading gamble." Under pressure from competitors like Polymarket, Kalshi chooses to embellish data to prop up its capital narrative. On one hand, it uses a 0 basis point rebate to mask market-making funds from one hand to the other; on the other hand, it exploits parlay bets with winning probabilities approaching 0 to create a lottery trap, inflating a $1 premium to thousands in apparent trading volume through crude accounting magic.

Perhaps, the self-discipline and restraint of predictive market players are the most invaluable assets of the entire industry.