Kalshi terminates its liquidity incentive program following wash trading allegations, despite hitting $52.98B monthly volume in September.
DeFi & Yields ·
Kalshi is terminating its liquidity incentive program following allegations of wash trading on its platform. The move comes as the prediction market exchange recorded $52.98 billion in monthly volume during September, marking an all-time high, though September data remains incomplete as of the announcement date.
Liquidity incentive programs are designed to attract traders by offering rewards for providing market liquidity. Such schemes can create conditions where participants engage in self-dealing trades—buying and selling to themselves—to artificially inflate volumes and claim incentive payouts, a practice known as wash trading. The program's termination suggests Kalshi identified patterns consistent with this behavior among participants taking advantage of the incentive structure.
The timing and scope of wash trading activity detected remain unclear, as does whether Kalshi plans enforcement action against traders involved or regulatory disclosure of the findings. The exchange has not detailed what triggered the decision to end the program or provided specifics on the allegations themselves.