I've read the Kalshi response, the Wall Street Journal Article, and the Github repository of data so you don't have to in my humble opinion: The Kalshi transaction data is not conclusive proof of wash trading my full analysis below (it's worth your 5 minutes)

@beniduboss got another one for you

@beniduboss please don't hurt me beni I admire your commitment and unceasing pursuit I just don't think it's definitely wash trading (though, it could be)

@beniduboss also DO NOT fuck with the french is the main takeaway from this

@SkotiVi Call me French one more time and we might have issues ps; wash trading or not doesn’t matter, should’ve been more clear but again I didn’t expect this to get so big All it matters is that it’s deeply unethical at the scale it’s happening

@SkotiVi LMAO understood don't disagree in that I think the comms and framing from them is "improper" at best

@beniduboss pussy

@beniduboss bite me bro

Uhh getting paid to market make and you instead just trade back and forth to pump volume is always wash trading. Doesn’t matter what incentives you do or don’t have.

did you watch the video because the whole point is that that's not what's necessarily proven by the data

I did I don’t see how it’s not. The vast majority of the volume they are reporting/ showing to VCs is not organic. To say it’s market makers trading against each other is extreme cope and wouldn’t matter anyway. Nuance doesn’t matter here. Mercenary volume = wash trading.

it's inorganic for sure and a result of Kalshi incentives - that's acknowledged in the video that doesn't mean it necessarily fits wash trading not to mention, it's not clear that the counterparties here were acting in concert. It looks more like one side is paid to provide liq and the other side(s!) is(/are) using the zero fees to take advantage of tiny distortions in price that the liq providing mm is willing to take losses on

here's a plain english definition from CME group neither of these are conclusively proven as having happened by the data

Seems to check all the boxes- prearrangement, intent, result. “We got paid to market make, lucky for us some other anon market maker keeps buying our $5500 asks!”

prearrangement - not clearly shown. orders are hitting a public market and getting taken by at least one if not more takers intent - not clearly manipulative. one side is fulfilling their arrangement, and one side is taking orders that are displaced by the market by fractions of a % that wouldn't be profitable if not for the active fee holiday. this is kinda expected result - not manipulating the market as far as I can see, and the result is not a zero, it's profitable on avg for the taker (the person who compiled the data admits this) the provider of those $5500 tickets would, according to the data, rather their positions are never taken. they're losing money doing so.

your boys with that douche Ico , you rocked a kalshi badge for some period of time and you dance like a geeked out Keebler elf off some poppers. I'd say like most things, this came up a little short But hey, I got friends I'd defend, so that I get 🤷‍♂️

this is not defending kalshi lmao

Is there a disclaimer in here that you are good friends with ICO Beast?

nope because it's not needed I don't speak positively or negatively of kalshi, just read the published data and responses btw the WSJ article was a meme. it was like "fyi this happened on twitter this week" and that was it

Eddie you’d make a great lawyer

hopefully

note that it's also not conclusively NOT wash trading (double negative, I'm aware)

btw, this could be seriously problematic for other reasons–especially if they're using this inorganic metric for raising purposes but to call it wash trading is just not conclusively proven to be accurate in the data

Mate, if there was conclusive evidence the WSJ article would have a dif title and Guardian’s front page would feat Kalshi’s CEO+COO with a title “Forbes 30 Under 30 to prison pipeline remains unbeaten”

well yeah pretty much

maybe the 0% fees is the smoking gun ?

nah, if that was the case then CBOE would've had problems too Kalshi references extremely similar MM agreements like that the only smoking gun would be if we had transaction IDs, which is not publicly available. only Kalshi themselves has that data. realistically it's just incentivized behavior producing predictable results that should not be used for marketing material

ah so if this is to go to litigation there would need to be some sort of communication logs (legally ingested into disclosure from the prosecution) or additional evidence ?

yeah discovery would produce the logs and it would be pretty clear from there (so probably wouldn't go to litigation but instead would just settle, like what happened with Coinbase in 2021 i think)

yea i remember following the Coinbase stuff i actually have very very very very limited knowledge of the law as you know. appreciate you answering my questions

🫡 much love kuro

Fun fact, Eddie is standing up in this video.

on stilts

didn’t you used to have a Kalshi badge?

for like, a week or two not to mention this isn't a glowing review of kalshi lmao, it's just stating that it's not clearly wash trading I'd rather not say they did X if they did not conclusively do X imo if you want to say someone is bad, show it with conclusive proof

the volume is still clearly inorganic and it shouldn't be something the company hangs their hat on publicly (as they've done) it's just not definitively wash trading as is being thrown around on the TL

Great legal advice here Are you our attorney now?

not yet! waiting for bar results tbd tbd

@WajdaNFT wait actually? good stuff Eddy

@WajdaNFT results come late oct / early nov - should be alright but kinda holding breath until then

@xenothales I heard holding your breath can stunt your growth. Breathe king

@grok can you transcribe please

Read the full breakdown—agree the data alone doesn’t get to wash trading Your take feels measured, not overreaching

The argument is that Kalshi is inflating volume to boost their valuation/metrics. Everything you mention here is semantics. If market makers are trading back and forth for pennies because Kalshi is subsidizing them to do so, the net result is the exact same.

legally no, v different consequences for "wash trading" vs. "faking volume for metrics" also, not clear that they're faking the volume, but it is clear that their incentives are driving substantial inorganic vol on certain pairs to the tune of like, ~50% of the volume lmao

Legally, "wash trading" has a specific definition: Under the Commodity Exchange Act — §4c(a)), a wash sale is a purchase and sale made without intent to take a genuine market position, where both sides are effectively the same economic actor (same owner, or a prearranged agreement). The defining feature isn't why it happens — it's that no real market risk changes hands. Considering Open Interest is remaining virtually zero from all this volume, it seems quite synonymous with Wash Trading. Whatever is happening, no one is taking any real market risk, that is quite clear IMO.

not really taker is taking a genuine market position and on avg selling it for profit because of distortions between the real market price and the ticket from the MM these distortions are minimal but genuine + only profitable because of the fee holiday also unclear that it's the same actor market risk is also definitely changing hands if there's no agreement etc, which is completely unascertainable from the data alone. OI staying low is a function of the type of trade (immediately clearing in profit, on avg) than it being proof of wash trading

not at all related but have you been working out bro?

Yeah lmao

Absence of evidence != evidence of absence

the fact you went through the github data yourself instead of just quoting the wsj piece already makes this worth watching

good noob friendly explanation

@tweem 15k views

engagement slop larp

This would have been more convincing if you had shown your sick dance moves instead of explaining it

Thanks for the informative video

o7

based

Good video slime

thx king

read the repo too and came away with more questions

The delta is just noise

The data first approach makes this worth reading.

volume inflation is just as bad as wash trading, since it’s with this volume that they are fooling investors on raising capital.

now i’m curious about the data

Not reading