The death of Iran’s leader sparks controversy in prediction markets; Kalshi refunds $2.2 million, with the CEO claiming they refused “death arbitrage.” Before the airstrike, U.S. lawmakers demanded strict scrutiny of contracts related to war and assassination predictions, with a deadline to respond by March 9.
Kalshi’s “Khamenei Resignation” Prediction Contract Sparks Debate
Following the joint U.S. and Israeli airstrikes that resulted in the death of Iran’s Supreme Leader Ali Khamenei, Kalshi CEO Tarek Mansour stated that their platform’s trading volume exceeded $50 million on contracts related to the event. He emphasized that their goal was to prevent investors from profiting from the death.
The contract was titled: “Will Khamenei step down as Iran’s Supreme Leader?” with rules stating that if Khamenei dies, settlement would be based on the last trading price before death. When news of Khamenei’s death broke, a surge of funds flooded into the contract, and Kalshi suspended trading due to settlement chaos.
Kalshi later admitted that the settlement terms contained ambiguous language and ultimately decided to refund users’ net losses. Sources told Bloomberg that this move cost the platform about $2.2 million.
Kalshi’s Promotion and Settlement Standards Under Fire
After Kalshi processed refunds, criticism emerged within the community, mainly because Kalshi had promoted this contract at the time of the event. Last Saturday morning, news of Khamenei’s death began circulating, Kalshi posted on X: “Breaking: The probability of Khamenei no longer serving as Iran’s Supreme Leader has surged to 68%,” which Mansour also retweeted.
Image source: X
Former SEC Chief of Staff Amanda Fischer criticized this, saying Kalshi’s actions were akin to providing a marketplace for assassination proxies.
Users also criticized Kalshi’s settlement standards, pointing out that when Jimmy Carter passed away, the platform settled his contract as “no,” accusing the platform of only applying special terms when losing money.
Dennis Kelleher, CEO of Better Markets, stated that Kalshi’s actions reveal an attempt to balance expanding trading volume with avoiding clear laws banning assassination-related bets.
Prediction Markets Cross the Line, U.S. Lawmakers Call for Investigation
Prediction markets are often seen as “anything can be traded,” but this incident highlights their limits. Before the U.S.-Israel airstrikes on Iran, California Democratic Senator Adam Schiff sent a letter to CFTC Chair Michael Selig demanding strict regulation of contracts related to war and assassination, with a response deadline of March 9.
Connecticut Democratic Senator Chris Murphy also announced he is drafting legislation to ban such market contracts to prevent insider trading and manipulation based on known outcomes. The Kalshi settlement controversy proves that such betting markets should not exist.
Polymarket’s Wordplay Sparks Controversy
Compared to Kalshi, Polymarket still hosts 187 Iran-related markets. One of these predicts whether the U.S. will forcibly remove Khamenei before March 31. Polymarket ultimately settled this contract as “no,” reasoning that the U.S. only contributed or assisted in the killing, which sparked strong dissatisfaction among some commentators and calls for dispute resolution.
Because Polymarket relies on blockchain-based decentralized settlement mechanisms, the fairness of contract judgments remains under scrutiny.
On-chain data shows that, hours before the airstrike, six anonymous wallets collectively bet on “U.S. attacking Iran before February 28,” ultimately earning about $1.2 million. These wallets were almost all newly created accounts in February, with funds transferred within 24 hours before the event. Such suspicious trading patterns have raised concerns about military secrets leaking and potential on-chain insider arbitrage.
Related report:
Pre-airstrike prediction? Polymarket traders bet on US-Iran war, earning $1.2 million, sparking controversy
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
The next U.S. presidential "conservative primary": JD Vance wins with 53% over Marco Rubio's 35%.
At CPAC 2026, a conservative conference in the United States, Vice President JD Vance became the leading candidate for the 2028 Republican presidential nominee with 53% of the vote, while Secretary of State Marco Rubio placed second with 35%. During the conference, Trump was absent, and divisions within the party surfaced, particularly over disagreements regarding a war with Iran. The competition between Vance and Rubio is becoming increasingly evident, and Polymarket predictions indicate that their odds of securing the nomination are roughly similar.
動區BlockTempo5h ago
Inside the Trump administration, there were discussions about seizing Halk Island.
The Trump administration has recently been wavering on its stance toward the war. The White House warned that if Iran does not abandon its nuclear ambitions, it could face a devastating strike, while also considering seizing Hark Island to counter the weapon threat. Market predictions show that in the short term, the odds that Iran will no longer control Hark Island are relatively low.
BlockBeatNews6h ago
AI surpasses humans in prediction markets with super-fast processing speed.
Artificial intelligence is rapidly transforming the prediction market by analyzing vast amounts of data in real-time, outperforming human capabilities. This leads to instant reactions to news and market trends, raising concerns about fairness and power concentration.
TapChiBitcoin6h ago
California governor signs an executive order prohibiting government officials from insider trading in prediction markets.
Gate News reports that on March 29, California Governor Gavin Newsom signed an executive order prohibiting government appointees from using non-public information obtained during their official duties to profit from insider trading in prediction markets. The executive order specifies that public officials appointed by the governor are not allowed to use "confidential or non-public information" to bet on political or economic events related to their positions. The ban extends to their spouses, family members, and former business partners. Newsom stated that public service should not become a tool for profit and that the boundaries between power and interests need to be clearly defined.
GateNews7h ago
The Pentagon is preparing for several weeks of ground operations in Iran
BlockBeats News, on March 29, reported by The Washington Post, U.S. officials stated that the Pentagon is preparing for several weeks of ground operations in Iran.
According to PolyBeats monitoring, on the prediction market Polymarket, the probability of U.S. military entering Iran before the end of this month is 11%, and the probability before the end of April is 62%.
BlockBeatNews7h ago
