The prediction was right. The payout was not. When a US-Israeli airstrike killed Iranian Supreme Leader Ayatollah Ali Khamenei on Saturday, prediction market platform Kalshi did what few traders saw coming—it voided every bet.
Kalshi had listed a contract asking whether Iranian Supreme Leader Ayatollah Ali Khamenei would be removed from power. But this got voided after a US-Israeli airstrike killed him on Saturday, igniting fierce backlash from thousands of traders who had wagered a combined $54 million on the outcome.
The platform had promoted the contract across social media for days before the strike. When the crucial moment arrived, Kalshi cited a hidden clause in the contract’s terms, stating that removal by death was not a valid resolution. The contract would not pay out.
Traders Cry Foul
Anger erupted almost immediately on Kalshi’s Discord server. “Getting rugged on a 100% correct prediction because of a fine-print death carveout is wild,” wrote one trader. Another was more blunt: “What you’re doing is stealing.” Critics argued Kalshi had knowingly listed a market tied to human death, collected tens of millions in trades, and then hid behind compliance language when it came time to settle.
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US Senator Chris Murphy called the entire arrangement “It’s insane this is legal.” Amanda Fischer, former Chief of Staff of the U.S. Securities and Exchange Commission, told NPR that prediction markets were actively promoting wagering on events that function as proxies for war and assassination, adding that such markets should not exist at all. Six Democratic senators had already urged the U.S. Commodity Futures Trading Commission (CFTC) in late February to ban death-linked contracts. In the wake of the recent development, the bet on Khamenei made their warning look very valid.
A Darker Pattern Across Crypto
Kalshi’s offshore rival Polymarket saw roughly half a billion dollars traded on contracts tied to when US forces would strike Iran. The crypto world’s relationship with death markets runs deeper still. Assassination market concepts date back to a 1995 essay by cypherpunk Jim Bell. Prediction platform Augur launched in 2018 and hosted such markets almost instantly. In January 2026, an anonymous Polymarket trader collected $400,000 on a suspiciously well-timed bet on the removal of former Venezuelan President Nicolás Maduro from power.
