On March 2, news broke that Iran’s Supreme Leader Ali Khamenei died in an airstrike incident, and prediction markets related to his death are facing strong criticism from U.S. political circles. Some U.S. senators are calling on regulators to restrict prediction market contracts settled on personal death, quickly bringing crypto prediction platforms and related financial products into the spotlight.
Data shows that on the decentralized prediction platform Polymarket, contracts related to the timing of the Iran airstrike have traded over $529 million. Meanwhile, on the prediction platform Kalshi, trading volume for contracts on whether Khamenei will remain as the Supreme Leader has exceeded $50 million, with about $20 million traded just on Saturday alone. Following confirmation of the airstrike, these contracts rapidly moved toward settlement.
According to documents submitted by Kalshi to the Commodity Futures Trading Commission (CFTC), all positions are settled based on the last transaction price before Khamenei’s death. The platform then paused trading and closed the contracts. However, there are discrepancies between the settlement rules described on the market page and the official documents, raising user concerns. The market remained active for hours between the airstrike and the death confirmation, becoming a point of controversy.
Kalshi later issued a statement acknowledging ambiguities in some rules and announced that all market fees would be refunded. Additionally, any positions opened after Khamenei’s death will be fully refunded.
Meanwhile, blockchain analytics firm Bubblemaps found that six newly created accounts profited about $1 million by accurately predicting the timing of the Iran attack on February 28. These accounts almost exclusively bet on the attack date, with some trades completed hours before the airstrike began. Nicolas Vaiman, CEO of Bubblemaps, noted that war and conflict-related events often attract informed traders to bet early, and anonymous trading environments may amplify this risk.
U.S. Senator Adam Schiff, along with several Democratic colleagues, has jointly written to CFTC Chairman Michael Selig, demanding that regulators ban prediction market contracts related to personal death and requiring a response by March 9. Industry organization Coalition for Prediction Markets also publicly stated that contracts involving death events should not appear in U.S. markets.
Analysts believe that as the intersection of war, politics, and crypto prediction markets continues to expand, regulators may strengthen oversight of these platforms in the future. The legality and ethical boundaries of prediction market contracts are expected to become new issues in financial regulation.
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