CFTC terminates Kalshi volume rebate program after wash-trading allegations
The CFTC issued a notice terminating Kalshi's volume incentive program, which paid traders rebates on their own volume under Kalshi Rule 3.13(f). The agency did not provide additional reasoning. Kalshi plans to end the program by October 13. The decision follows allegations of wash trading on the platform. Kalshi hit a monthly volume record of $52.98 billion in September as of Sept. 29. The rebate structure had been described as standard for a young exchange.
Kalshi's volume-based marketing pitch collapses without the rebate engine that inflated headline numbers. Traders who sized positions against reported liquidity now face a black box: the CFTC gave no reasoning for the termination, so platforms cannot guess what replacement structure survives regulatory review.
Kalshi must either absorb the marketing cost of lower reported volume or design an incentive that skirts the same scrutiny. Competitors like Polymarket and Robinhood, with cleaner volume disclosures, can capture migrating flow during the NFL season. The first platform to publish a CFTC-compliant incentive structure will set the template the rest must adopt.
Kalshi's volume incentive termination follows the CFTC's earlier scrutiny of $5 billion in near-identical ether trades and the platform's subsequent denial of wash-trading claims, deepening a running transparency crisis that now spans its crypto derivatives and rebate programs alike.