Kalshi Executive IcoBeast: Allegations Unfounded
Kalshi's head of crypto business, IcoBeast.eth, issued a more comprehensive statement regarding allegations of trading volume manipulation and perpetual contract manipulation, refuting previous doubts item by item and for the first time clearly addressing the qualification criteria for "self-settling members" (SCM).
In response to analyst Beni's claim of a "174x turnover rate" based on Artemis charts, IcoBeast.eth clarified that the chart reflects the share of trading volume in the prediction market, not perpetual contract trading data, and that conflating the two is the core misunderstanding of the controversy.
He stated that Kalshi does not provide any rebates for the crypto prediction market, and that the statistics for contract quantity and nominal amount are consistent with other prediction market platforms, thus making them comparable, with no motive to artificially inflate trading volume.
Regarding the accusation that "SCM is designated by Kalshi's market makers," IcoBeast.eth denied this, stating that any institution meeting CFTC regulatory requirements can apply to become a self-settling member, and that "fair access" is itself one of the regulatory requirements, not a privilege granted by the exchange.
He also acknowledged that rebates and incentive programs are common in the industry, naming CME, Hyperliquid, and Binance as having similar mechanisms; the difference is that Kalshi, as a CFTC-regulated exchange, must publicly file all incentive programs, while offshore perpetual contract platforms typically do not disclose similar arrangements.
On the market side, the current controversy over the authenticity of trading volume has led some traders and market makers to question the credibility of Kalshi's prediction market business, especially as it seeks to raise its valuation from $22 billion to $40 billion during its financing window; if doubts continue to fester, it may affect institutional market makers' willingness to quote and the valuation anchor points in new financing negotiations, and IcoBeast.eth's statement is an attempt to stabilize market confidence during this window.
IcoBeast.eth characterized the perpetual contract business as "still in its early stages," contrasting it with the main status of Kalshi's prediction market business, which also partly explains why the trading data scale in this sector is relatively limited and more easily misinterpreted.
Source: Public Information
ABAB AI Insight
Since 2024, Kalshi has been actively lobbying the CFTC to promote the legalization of prediction markets, and in 2025, it reached distribution partnerships with brokerages like Robinhood and Webull, launching various prediction contracts in sports, politics, and economic data; this crypto perpetual contract business represents another expansion of its business boundaries beyond traditional prediction markets, following previous jurisdictional conflicts with state regulators over sports contracts.
After completing financing in 2025, Kalshi's valuation reached $22 billion, and it is currently seeking to complete a new round of financing at an approximate valuation of $40 billion. Fund flows indicate that it is shifting the valuation premium of its prediction market business to the crypto derivatives sector, which is higher frequency and higher leverage; IcoBeast.eth's public statement is essentially aimed at managing risk perceptions for potential investors and market maker partners, serving as a narrative maintenance during the financing window.
This scenario is reminiscent of the controversies surrounding trading volume manipulation faced by FTX in 2021 and several centralized exchanges in 2022—exchanges attract market makers to create apparent trading volume through rebates and incentive programs during the early stages of liquidity, thereby gaining a premium in valuation negotiations; the difference is that Kalshi, as a CFTC-regulated licensed exchange, has a mandatory disclosure obligation for its incentive arrangements, placing it in a position of "compliance arbitrage" rather than a "regulatory vacuum" in the industry.
This essentially reflects a transfer of pricing power driven by regulatory changes—the CFTC's regulatory framework for prediction markets and crypto derivatives is still taking shape, and whoever can first establish "compliance and transparency" as a competitive barrier will gain pricing power and market maker resource advantages in the battle for users against offshore perpetual contract platforms; Kalshi's emphasis on "public filing" is an attempt to convert regulatory costs into a moat that competitors find hard to replicate.
ABAB News · Law of Cognition
The more transparent the regulation, the more it becomes a bargaining chip in valuation games.
The more intense the questioning, the more it exposes the value of the sector.
Compliance is not the end point, but the starting point for premiums.