Prediction market platform Kalshi has submitted a request for approval to the U.S. Commodity Futures Trading Commission (CFTC) to introduce leveraged trading in U.S.-regulated event contract markets.

On Sept. 22, blockchain outlet Cryptopolitan reported that Kalshi’s self-clearing organisation, Kalshi Klear, submitted an application seeking permission to allow leveraged trading through borrowing.

Kalshi said the current fully cash-collateralised system limits institutional participation in long-term contracts. U.S. regulated event contract exchanges require traders to post the full position in cash, tying up funds in contracts with months remaining until expiry. Kalshi explained that allowing institutions to borrow would improve capital efficiency and make long-dated contract trading more economically viable.

It designed the scope of leverage in a limited way. It proposed a tiered framework that increases collateral requirements as contract expiry approaches, and excluded contracts classified as sports, culture and “mention” markets from leverage. A Kalshi spokesperson said that even if the CFTC approves, the borrowing feature would be offered only to self-clearing members that have a direct relationship with Kalshi Klear and meet set capital requirements.

Questions have also been raised about the trading structure. DefiLlama data showed that in Bitcoin and Ethereum perpetual futures markets, repeatedly executed trades in certain fixed amounts accounted for more than half of total trading volume.

In an Ethereum perpetual futures sample covering Sept. 17 to Sept. 20, trades with a per-transaction amount of $5,499 within a plus or minus $2 range totalled $7.7 million, accounting for 57 percent of the total. In Bitcoin, repeated trades in about $2,500 and $5,000 units accounted for 54 percent of sample activity. In addition, in 43 of 46 hourly samples collected since June 19, trades in fixed amount units were repeated.

Still, repeated trade amounts alone cannot determine the actual number of participants or the degree of concentration. If leverage is introduced, how much trading is concentrated among a small number of participants is also likely to be reviewed.

The application also aligns with Kalshi’s business expansion. Kalshi already offers leverage on perpetual futures products, and it completed CFTC procedures this month related to launching gold and silver perpetual futures. Perpetual futures launched in late May starting in the cryptocurrency sector have so far recorded more than $44 billion in notional trading volume. Kalshi has also filed an application to add U.S. stocks, copper and foreign exchange-based perpetual futures.

Competition targeting institutional demand is also continuing. Rival Polymarket moved in July to secure the licences and approvals needed to provide leveraged trading in the U.S. event contract market in the future.

The application does not resolve regulatory conflicts surrounding Kalshi. The longest-running dispute concerns sports contracts. Connecticut filed a lawsuit against Kalshi in August and has not accepted a classification that treats sports contracts as federally protected derivatives. A Michigan court signed an order on Sept. 1 warning of penalties of up to $500,000 per day if Kalshi continues to offer sports markets locally. New Jersey has gone to the U.S. Supreme Court to obtain a final ruling on whether oversight authority for this market lies with the CFTC or state governments.

Given this regulatory environment, Kalshi’s exclusion of sports contracts from this margin application is read as a choice to avoid further increasing the risk of disputes. Depending on how the CFTC decides on approval, the scope of institutional participation and the trading structure of the U.S. regulated prediction market are also expected to change.