The U.S. Commodity Futures Trading Commission is investigating alleged wash trading on Kalshi, according to a report from The Wall Street Journal. A person familiar with the matter said the probe follows claims that, since August, traders on the prediction market platform carried out nearly 1 million transactions in Ethereum futures with nearly identical amounts, drawing attention from federal regulators and traders.

According to Foresight News, Kalshi said in a blog post that no fake trading takes place on its platform and that repeated quotes come from fixed prices posted by market makers, which faster traders then capture. Kalshi co-founder Luana Lopes Lara told The Wall Street Journal that it is not unusual for exchanges to try to attract large traders into new markets to support broader adoption. She said any market trying to launch new products and businesses goes through this process and that it is normal.