Suspicious Kalshi bot shuts down amid wash trading claims

A trading bot making cheap uniform trades on a Zohran Mamdani Kalshi market has stopped trading after it raised suspicions that the prediction market was wash trading its perp volume. 

The wash trading allegations began last weekend when “Beni,” a pseudonymous quant analyst, claimed Kalshi’s 24-hour trading volume of ether perpetual contracts was $539 million, while open interest was just $3.1 million.

They also flagged a series of $5,500 trades that supposedly made up for 58% of Kalshi’s ETH perp volume across four days. 

Kalshi’s crypto lead, IcoBeast.eth, aggressively rebuffed Beni’s claims, and now Kalshi has posted its own article in which it attempts to debunk the argument and claim the “wash trading rumors are false.”

i thought more about it. beni, sorry for being a dick. i shouldn't have attacked you personally. it was cocky and unnecessary, and i should have stuck to the facts.

i do want to clarify one thing: our incentives pay for liquidity, not wash trading. the claim that we’re…

Read more: Kalshi won’t let you bet on its Supreme Court outcome

One specific bot was reportedly trading the 2028 Democratic Presidential Nominee market, specifically on Mamdani’s ticker. This is despite the fact that Mamdani can’t be the presidential nominee due to him not being born in the USA.

Prediction market analyst TickerTracker compared the bot’s activity to a metronome as it bought shares for two tenths of a cent before selling them for one tenth of a cent repeatedly every four seconds across almost two months. 

Today, analysts noted that it stopped trading after the continuous back-and-forth trades. 

Kalshi has the same wash trading pattern in its prediction markets too

Take the Mamdani "2028 Democratic presidential nominee" market

Between August 1 and September 19, someone has been buying and selling $1 of this contract every 2 seconds for $2M

The bot is active rn and you… https://t.co/dYRS6yO5qX pic.twitter.com/R35pn0oZkF

Read more: CFTC orders Kalshi to continue operations amid New York lawsuit

Prediction market tool firm Resolve even claimed to have made around $30 a day counter-trading the metronome bot. 

Some users have suggested that the trades might just be a bug, while others suggested that the bot might be “someone farming volume for a higher rate limit tier.”

TickerTracker noted that notional volume within prediction markets can often be inflated, and automated trading can be an ordinary occurrence. 

They added that while these trades might break Kalshi’s rules, “Maybe there’s a simpler explanation for these anomalies that we’re overlooking?”

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