Kalshi (KALSHI) Price on Solana

Trading activity on Kalshi's ether perpetual futures is under scrutiny after CNBC found that on September 20, nearly half of the contract's dollar volume came from trades sized between \$5,495 and \$5,505. An X user, Benoît Dubosson, first flagged the pattern. Academics who spoke to CNBC, Barnard College economist Rajiv Sethi and Ulm University finance professor Andre Guettler, said the volume-to-open-interest ratios on Kalshi's bitcoin and ether perpetuals, at roughly 42 to 66 times, looked unusually high. "It doesn't look very organic," Guettler said.

Kalshi denies that wash trading happens on any of its products. Spokesperson Jack Such said the company has "zero concerns" about the ratios and put the clustered trades down to speculators arbitraging price differences between exchanges. The questions matter because Kalshi cites volume as evidence of growth. The company is reportedly in talks to raise money at a \$40 billion valuation, is exploring an IPO as soon as next year, and has waived trading fees through the end of 2026. CNBC's report also raised separate questions about low-odds contract volume on Polymarket's international exchange, which Polymarket likewise disputes.

The 6th U.S. Circuit Court of Appeals in Cincinnati ruled on September 25 that Ohio and Tennessee can apply their gambling laws to Kalshi's sports-related event contracts. Judge Julia Smith Gibbons wrote for a unanimous three-judge panel. The panel found that Kalshi had not shown its sports contracts are "swaps", the category of derivatives that falls under the Commodity Futures Trading Commission (CFTC). Kalshi's position is that all event contracts are swaps and are therefore governed by federal law. The states argue that sports contracts are sports betting and need a state licence.

This is Kalshi's second loss at the appeals level, CNBC reports. Last month the 9th Circuit ruled that Nevada can regulate sports event contracts as sports bets. The 3rd Circuit went the other way in April and let Kalshi keep operating in New Jersey. Federal appeals courts are now split on whether states or the CFTC have authority over sports prediction markets, which makes it more likely the U.S. Supreme Court will take up the question. Until that happens, Kalshi's sports contracts in Ohio and Tennessee are open to state gambling enforcement.

Kalshi has formally petitioned the CFTC to permit margin lending on its prediction market platform, a move that would let institutional traders buy event contracts with borrowed funds. The application was filed through Kalshi Klear, the company's in-house clearing entity, and would apply to longer-dated contracts such as those tied to elections, commodity prices, and major macroeconomic events. The company is proposing to exclude sports, mentions, and culture bets from the program; only self-clearing members who maintain direct relationships with Kalshi Klear and meet specified capital requirements would have access. As contracts approach expiry, required capital would increase to manage leverage risk.

The petition marks a deliberate push to reposition Kalshi as infrastructure for institutional hedging rather than a consumer-facing betting app. Kalshi already offers leverage on its perpetual futures contracts but has not yet received regulatory approval to extend it to prediction markets. Institutional use cases cited include companies such as Meta hedging AI compute costs and Home Depot managing lumber price exposure. Approval would put Kalshi closer to the capital-markets model that larger financial institutions expect and widen the gap with competitors such as Polymarket, which operates without such regulatory standing.

Kalshi is planning to launch roughly 60 perpetual futures contracts tied to major US stocks and ETFs, with initial products targeting Tesla, Apple, and Nvidia — limited to companies with market caps above $100 billion. Unlike standard futures that expire, these "perps" would trade 24/7 with no expiration date and offer leveraged exposure, similar to the gold and silver perpetuals Kalshi recently launched with up to 15x leverage. CEO Tarek Mansour called perpetuals "the purest form of trading," and the company points to offshore platforms like Hyperliquid generating $212 billion in single-stock perp volume in 2026 as evidence of domestic demand for a regulated equivalent.

The expansion faces a more complex regulatory path than Kalshi's Bitcoin perps, which received CFTC approval in May 2026. Single-stock perpetuals require sign-off from both the CFTC and the SEC, since equity-linked products fall under dual jurisdiction. Critics have flagged the risk of significant retail losses given continuous leverage availability and funding payments inherent in perpetual structures. If cleared, the product would mark a significant competitive step for Kalshi as it pushes beyond prediction markets and event contracts into more traditional leveraged derivatives territory.

Ingham County Circuit Judge Rosemarie Aquilina issued an injunction on September 3, 2026, barring Kalshi from operating sports event contracts in Michigan, with a $500,000-per-day fine for non-compliance. The judge characterized Kalshi's offering as a "sports betting operation masquerading as an investment opportunity," citing Michigan's minimum gambling age of 21 versus Kalshi's acceptance of users as young as 18, and alleged harm to state school funding, gambling prevention programs, and tribal gaming revenues. Michigan Attorney General Dana Nessel originally filed suit in March 2026 under the state's Lawful Sports Betting Act; the case was moved to federal court before returning to state court for resolution.

Under the order, Kalshi must immediately stop accepting deposits and new account registrations from Michigan residents, halt all in-state advertising including app push notifications and influencer placements, and deploy a third-party geolocation provider licensed by the Michigan Gaming Control Board within three business days. The ruling adds to a growing list of state-level challenges confronting Kalshi: a similar injunction has been issued in Washington state, and the CFTC has separately filed suit against nine states over prediction market restrictions. Kalshi is represented by former acting U.S. Solicitor General Neal Katyal.

Donald Trump Jr. holds financial interests in both of the dominant US prediction market platforms, according to reporting by Yahoo Finance. He became a paid strategic advisor to Kalshi in January 2025 and received equity then valued at $300,000; seven months later he joined Polymarket's advisory board and, through his venture firm 1789 Capital, is contributing $300 million to Polymarket's $1 billion funding round, which values that platform at $21 billion. Kalshi's own valuation has since reached $22 billion. Kalshi stated his advisory role focuses on marketing strategy and not regulatory matters.

The dual arrangement draws scrutiny because the two platforms compete for the same users and, to a significant degree, the same regulatory outcomes. Trump Jr. reportedly urged Republican attorneys general in March to resist state-level restrictions on prediction markets, arguing that traditional gambling interests were behind the regulatory pushback. The CFTC has simultaneously sued nine states to block state-level oversight of prediction markets, and President Trump described prediction markets as "a new class of financial product" in May while supporting CFTC authority over them — placing his son's financial interests squarely inside an ongoing policy debate.

Kalshi has issued a three-year ban and a \$2,589.96 fine against Laurie Buckhout, a Republican House candidate in North Carolina's 1st Congressional District, after she placed bets on her own electoral race in violation of platform rule 5.17(z), which bars traders with direct influence over an event from trading related contracts. Buckhout publicly acknowledged the violation, saying it was "a dumb mistake," and her cooperation with Kalshi's investigation earned her a lighter penalty than other recent cases — former congressman George Santos received a lifetime ban and a \$70,000-plus fine after refusing to cooperate in a similar matter.

The action is part of a visible pattern of integrity enforcement by Kalshi as it heads into the 2026 midterm cycle. The CFTC and Kalshi also recently acted against a White House teleprompter operator who traded on advance knowledge of a Trump speech, and a bill introduced by Representative Bryan Steil in June would impose statutory restrictions on lawmakers' political betting. Together, the cases signal that the exchange is actively policing conflicts of interest on its political markets rather than relying solely on regulatory guidance.

The CFTC penalized Gabriel Perez, a White House teleprompter operator, for trading on non-public information about the content of President Trump's speeches on Kalshi's prediction market platform. Perez was ordered to disgorge $107,539 in profits and pay a $65,000 civil penalty, and accepted a three-year trading ban. Kalshi itself identified and reported the account before any self-disclosure — a detail the CFTC acknowledged by offering reduced penalties for "exemplary cooperation."

Following the enforcement action, Kalshi's head of enforcement Robert DeNault issued a public warning to all platform users: "It doesn't matter who you are: violate our rules or federal law and you will face the consequences." The case is being cited as evidence that US-listed prediction markets have meaningful surveillance and enforcement capabilities — a point of ongoing regulatory debate — and adds to the growing body of CFTC actions touching the sector as Kalshi continues to expand its product offering.

The Ninth Circuit Court of Appeals ruled against Kalshi on Friday, determining that the sports prediction contracts the platform offers likely do not qualify as "swaps" under federal commodity law. Writing for the court, Judge Ryan Nelson held that interpreting swap definitions broadly enough to cover Kalshi's products "would raise concerns under the major-questions doctrine" and does not represent the most reasonable textual reading — a decision that rejects Kalshi's argument that CFTC oversight preempts Nevada's authority to regulate its markets as sports betting. Nevada Gaming Control Board Chairman Mike Dreitzer said the ruling "completely vindicates" their position that prediction market sports contracts must be regulated at the state level.

The ruling directly contradicts an April Third Circuit decision that allowed New Jersey to permit prediction markets, creating a circuit split that legal observers say makes a Supreme Court review highly probable. Until that question is settled, Kalshi faces continued enforcement actions in Nevada — including injunctions barring it from accepting bets in the state — and broader uncertainty about whether its model can operate without state-by-state gaming licenses. Robinhood and Crypto.com, which filed arguments alongside Kalshi, are similarly affected.