Kalshi will terminate its "Volume Incentive Program" no earlier than Oct. 13, according to a Monday filing with the Commodity Futures Trading Commission, a decision that arrives amid allegations of wash trading on the prediction markets venue.

The program launched in March 2023 and paid traders from reward pools based on their share of eligible volume, with the stated aim of boosting liquidity and enhancing pricing efficiency. Rewards were tied to trades on the central limit order book, typically at prices between $0.03 and $0.97 for event contracts, the filing said.

Kalshi's withdrawal of the incentive scheme follows mounting scrutiny of trading activity on the platform. The Wall Street Journal reported last week that the CFTC was examining trades on the exchange after allegations that repeated trades of roughly $5,500 inflated ether perpetual futures volume. Those trades accounted for more than $5 billion in ETH perps volume over the past month.

The allegations originated in part from an X account named Beni, which flagged roughly $539 million in 24-hour trading volume against just $3.1 million in open interest on Kalshi's ETH perps pair — a discrepancy that suggested circular, self-matching flow rather than genuine risk transfer.

Kalshi denies any manipulation. In a blog post published last week, the company said wash trading does not occur on the platform and attributed the repeated prints to market makers posting fixed quotes that faster traders hit. Kalshi has also said it is not under investigation over the matter.

Ending the program carries operational consequences. Market makers who earned rebates for quoting continuous two-sided markets may reduce participation once payments stop, potentially widening spreads on Kalshi's event contracts. As a CFTC-regulated designated contract market, Kalshi must file rule changes with the commission, which makes the Oct. 13 date a formal regulatory commitment rather than a soft product sunset.

The controversy has not slowed the venue's headline growth. Kalshi's monthly volume reached $52.98 billion in September as of Sept. 29, an all-time high that surpassed the $38.67 billion recorded in August, according to The Block's data dashboard. September data remains incomplete, meaning the final figure will likely be higher.

The discrepancy between record volume and open interest is central to the wash trading debate. Volume measures gross trading activity, while open interest measures contracts outstanding — a market can post enormous volume with minimal net positioning if the same positions are repeatedly opened and closed.

Investor interest in Kalshi is accelerating even as the scrutiny intensifies. Cathie Wood's Ark Invest announced Tuesday that it now holds direct exposure to Kalshi through its ARKK, ARKW and ARKF exchange-traded funds. Ark said it sizes the medium-term prediction market opportunity at $1 trillion to $5 trillion in annual volume.

"While Kalshi is still private, we want our investors in early," said Nick Grous, Ark's director of research for consumer internet and fintech.

"We are very happy to have introduced another private company, Kalshi, to our ETF strategies," Wood wrote on X. "Kalshi's management team is phenomenal, as it is skating to where the prediction markets puck will be."

The Ark disclosure coincides with Kalshi's reported fundraising push. Reuters reported Tuesday that the platform is in advanced talks to raise about $1 billion at a roughly $40 billion valuation, with Tiger Global and Dragoneer among the parties in discussions.

Kalshi faces pressure on other fronts. Last week it lost an appeal over Ohio and Tennessee sports betting laws, widening a circuit split that could invite Supreme Court review, and Senate Banking Democrats have called for a public hearing on prediction markets.

The incentive program will wind down no earlier than Oct. 13, giving market makers roughly two weeks to reprice their participation while the CFTC's reported review of the ETH perps prints continues.