How Kalshi Works: CFTC-Regulated Event Contracts, USD Settlement
Kalshi is the first CFTC-regulated event-contract exchange. Here's how its contracts, clearing, and US-bank custody actually work.
Kalshi is a Designated Contract Market (DCM) regulated by the Commodity Futures Trading Commission. That regulatory status is the most important thing to understand about how it works — every other design choice flows from it.
Contracts are formally certified
Every contract Kalshi lists is filed with the CFTC, either as a self-certification or a request for approval. The contract specifies precise terms: what event, what resolution source, what dates, what payout, what position limits. This bureaucratic overhead is why Kalshi's catalog grows more slowly than Polymarket's.
Custody and clearing
Customer funds sit in segregated US bank accounts. Kalshi clears its own trades through a Derivatives Clearing Organization (DCO) it operates. There is no oracle and no chain; resolution is performed by Kalshi against the contract's specified resolution source.
Deposit / trade / withdraw
Fund via ACH (free, slow), debit card (small fee, instant), or wire. Trade through the web or mobile app against Kalshi's order book. Fees are taken on profitable closes — typically 1% to 7% of profit, varying by contract. Withdrawals are ACH and settle in 1–3 business days.
When Kalshi breaks
Kalshi's failure modes are traditional-fintech failures: ACH processor delays, KYC backlogs during signup surges, identity-verification edge cases. The exchange itself is more reliable under load than crypto-rail platforms because it doesn't depend on chain throughput.