Quantitative Analyst Beni: Gathering Evidence of Kalshi Fraud
Quantitative analyst Beni, who previously publicly questioned the authenticity of Kalshi's crypto contract trading volumes, has posted on social media to solicit "formal evidence of Kalshi's misconduct," requesting verifiable "smoking gun" information such as screenshots, emails, raw data, and timestamps.
Beni had previously pointed out that the open interest for Kalshi's ETH-PERP perpetual contract was only about $3.1 million, while the 24-hour trading volume reached $538.6 million, implying a turnover of approximately 174 times the total open positions daily, averaging a complete turnover every 8 minutes and 18 seconds, which far exceeds reasonable expectations.
Beni further disclosed that during four consecutive trading days he observed, identical single trades of $5,500 accounted for up to 58% of the total trading volume of Kalshi's Ethereum perpetual contracts. He referred to this repetitive trading pattern as "conclusive evidence of manipulation."
He also noted that the rebate structure filed by Kalshi with the CFTC includes a 0.3 basis point rebate on limit orders that exactly offsets a 0.3 basis point fee on market orders, resulting in a net fee rate approaching zero. This design objectively provides cost feasibility for wash trading.
IcoBeast.eth, head of Kalshi's crypto business, responded that Beni's initial accusation targeted "fraudulent trading volumes in Kalshi's prediction market," but the Artemis chart discussed by both parties actually shows the market share of prediction market trading rather than perpetual contract data, and Kalshi has not provided related rebates for its perpetual contract business.
The controversy has spread from perpetual contracts to Kalshi's core prediction market business—some KOLs have claimed that about 61% of the disclosed trading volume comes from "multi-event combination betting," while there is a significant discrepancy between the nominal amount publicly disclosed for combination betting and the actual principal bet, with the real trading volume possibly being only about 7.1% of the disclosed combination betting amount.
As of now, there are no CFTC enforcement records or third-party regulatory documents confirming Kalshi's wash trading activities. Beni stated that he has obtained "non-public information" and has consulted a lawyer, indicating that he may disclose more details depending on the situation. If the fraud allegations are ultimately substantiated, it will directly impact Kalshi's ongoing $40 billion valuation financing negotiations and the confidence of market makers in collaboration.
Source: Public Information
ABAB AI Insight
As a co-founder of Stealth Neolab, Beni has previously questioned wash trading behaviors on crypto platforms multiple times on social media by referencing on-chain and exchange data, primarily using quantitative indicators such as open interest and turnover rates. His accusations against Kalshi continue this established methodology.
Kalshi is currently seeking to raise its valuation from a previous $22 billion to approximately $40 billion in a new round of financing, with trading volume data being one of the core indicators to prove the growth potential of its prediction market and crypto derivatives business to potential investors. Beni's public solicitation for solid evidence objectively applies external audit pressure on the authenticity of trading volumes during this sensitive financing window, which may affect market maker collaboration terms and investor due diligence processes.
This scenario is reminiscent of the lead-up to the FTX collapse in 2022, where several on-chain analysts questioned the "mixing of customer assets and proprietary funds" through public data—those disclosed quantitative anomalies ultimately became one of the key factors undermining trust in the platform. The current crypto and prediction market industry is at a stage where "regulatory arbitrage dividends" coexist with a "data transparency catch-up period"; as exchanges move closer to traditional financial regulatory frameworks, the scrutiny standards for the authenticity of their data are becoming increasingly stringent.
Essentially, this represents a shift in pricing power driven by regulatory changes—Beni's solicitation for formal evidence effectively elevates accusations that were previously confined to social media "battles" to a compliance risk level that could trigger a formal CFTC investigation. Once a substantial evidence chain for regulatory intervention is formed, Kalshi's "compliance premium" as a regulated exchange will transform into a "compliance risk exposure," redefining its competitive advantage logic relative to offshore platforms.
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