The death of Ayatollah Khamenei sparks a revolt among Kalshi agents

In the lead All the way to the United States and Israel attacks It is Iran Prediction markets I witnessed a frenzy of conflict-related activity. Speculators were quick to guess when the first missile strikes would begin and who might be affected, resulting in trades worth hundreds of millions of dollars in total. There is already Big winners-And some big losers. This weekend, in the wake of the death of Iranian Ayatollah Ali Khamenei, Kalshi faced a customer revolt over how it handled a $54 million market over the fate of Iran’s leadership. “People are absolutely furious,” says Kalshi trader Nicholas Mahoney.

The market offered “yes” or “no” contracts on whether Khamenei would “exit” as the country’s supreme leader. On Saturday morning, while rumors of Khamenei’s death spread online but an official announcement had yet to be made, Kalci was promoting the market on social media. After his assassination was confirmed, many traders who bought Yes contracts assumed they had made a profit – after all, Khamenei was clearly no longer the Supreme Leader.

Instead, Calci paused the market for review on Saturday afternoon, eventually dissolving at the last trading position before he was killed. This means that many people who bought Yes trades did not get the returns they expected. Kalci declined to comment on the incident.

After the initial wave of criticism on Saturday, Calci’s CEO said… Tariq Mansour I noticed on social media that Calci’s rulebook has always included a “death exception” for markets on when leaders will leave office. Derivatives markets in the United States are not legally permitted to offer put contracts. But Calci did not add a notice about the cut to the market’s web page until after the attack on Iran began, meaning some traders did not see it. Violent reaction Came quickly. (sample Comment Online: “You have literally destroyed the credibility of your entire business.”) some traders He threatened class action lawsuits, and said they had filed complaints with the Commodity Futures Trading Commission, the government agency that oversees prediction markets.

Mansour stressed on Sunday that Kalshi had taken a financial hit for trying to solve the problem, and pledged to ensure that no one would lose money. “Kalshi takes a huge loss to make users full,” he wrote. Long apology. “I’m sorry for the disappointment. We will get better, thanks for bearing with us,” he wrote. Going forward, Mansour says Calci will make changes to more clearly highlight death withholdings in similar markets. A source in Calci told WIRED that the company lost approximately $2.2 million due to the incident.

Mansour’s apology did not satisfy some critics. “I defunded my account and deleted the app,” Mahoney tells WIRED. “They had to settle the market the way people thought it would.”

Although this was the largest predictive market dispute of its kind related to the war, it was not the only one. Some traders too criticize Polymarket L Her approach For a number of markets about events in Iran. How prediction markets handle sensitive contracts related to global events is an ongoing issue in the industry. Last year, for example, traders protest How Polymarket solved a popular market on whether Ukrainian President Volodymyr Zelensky, known for his casual clothing, will wear a suit before a certain date.

The controversy over contracts tied to the war in Iran arrives at a time when prediction markets are already in the doldrums Tighter regulatory oversight. A Increasing partisan movement In the United States, platforms are being called for more stringent regulation, and Kalci alone faces 19 separate lawsuits from state authorities. This week, Trump’s former chief of staff Mick Mulvaney, too Fired An advocacy group called Gambling Not an Investment aims to push for more guardrails on the sector.

Despite the recent turmoil, enthusiasm around prediction markets remains high. Traders who are eager to keep predicting what will happen in Iran are in luck, as Kalshi did market About who will be Khamenei’s next successor? Millions of dollars are already at stake.