Chain reactions
The US and Israel launched a missile attack on Iran over the weekend following the assasination of its supreme leader Ayatollah Ali Khamenei. That news has made six prediction market (PM) traders almost $1m, prompting accusations of insider trading.
made $1.2m on Polymarket for correctly predicting the missile strike
Saturday’s attacks on Iran’s capital Tehran and removal of Khamenei as the country’s leader, after he led since 1989, has shocked the world. It also led crypto-analytics firm Bubblemaps to allege it had discovered “six suspected insiders” who had made $1.2m on Polymarket for correctly predicting the missile strike.
Bubblemaps took to X with its data that revealed the mystery traders created new accounts on Polymarket to correctly wager the strikes would take place on February 28, with one winning more than $200,000 from a $26,000 bet:
On Sunday, some PM bettors and lawmakers launched attacks of their own, questioning the resolution of their bets on Kalshi and Polymarket, and whether such markets should be allowed to exist.
Market mayhem
While Kalshi doesn’t permit trades on assassinations or wars, account users could bet on Khamenei being “out as Supreme Leader,” which the NY-based firm’s CEO Tarek Mansour promoted via X. In response to Kalshi’s market on Khamenei, ex-Securities and Exchange Commission Chief of Staff Amanda Fischer stated the firm was:
more or less offering a proxy market on assassination.”
Polymarket bettors were also offered similar markets, including speculating on the date of a strike.
After President Donald Trump announced Khamenei’s death at 4:37pm on Saturday, chaos ensued on Kalshi and Polymarket.
Kalshi posted Saturday on X that if Khamenei died, “the market will resolve based on the last traded price prior to confirmed reporting of death.” After President Trump’s announcement, however, Kalshi posted that if the last-traded price was “unclear,” its outcome-review committee would set a “fair value.”
According to reports, users complained in droves on Kalshi, demanding the firm resolve the Khamenei market to a “yes” after Trump announced his death. The Wall Street Journal cited one Kalshi user as stating: “I bet his ass was going to be dead before March a week or two ago.”
Kalshi’s Mansour has stated his firm will refund users all fees collected from the Khamenei market and will pay out bettors based on the last-traded price before the Iran leader’s death.
Kalshi has set the moment of Khamenei’s death as a minute before the missile attacks on Tehran began, according to the WSJ.
Taking fire, again
While PMs came under heavy insider trader fire over the US’ ousting of Venezuela’s President Maduro, it’s nothing compared to Khamenei’s assasination.
Days before the strike, a group of senators urged the Commodity Futures Trading Commission to “prohibit any contract that resolves upon or closely correlates to an individual’s death.” While the CFTC expressly bans PMs involving terrorism, war or assassination, Sen. Chris Murphy took exception to firms finding a way past this.
It’s insane this is legal”
“It’s insane this is legal,” the Senator wrote on X. “I’m introducing legislation ASAP to ban this.” Murphy alleged that people around President Trump were “profiting off war and death.”
