Prediction market Kalshi apparently allowed traders to bet on the ousting of Iranian Supreme Leader Ayatollah Ali Khamenei, racked up $54 million in trades, then voided the result the moment he was killed in a US-Israeli airstrike.
Kalshi listed its “Ali Khamenei out as Supreme Leader?” prediction market contract before he was killed on Saturday.
Although a fiery death at the business end of a US or Israeli missile would certainly, in most people’s eyes, count as being “out,” Kalshi’s rules technically contained a death carve-out.
Specifically, the fine print specified that if Khamenei’s removal happened via death, the contract wouldn’t pay out.
Traders were predictably furious. “Getting rugged on a 100% correct prediction because of a fine-print ‘death carveout’ is wild,” one user wrote on Kalshi’s Discord.
“What you’re doing is stealing,” wrote another.
Critics accused Kalshi of trying to have its cake and eat it too by platforming a contract in the first place that involved bets on human death, then hiding behind compliance language when reality hit.
It had the option all along to not list the market for trading, after all. It decided to list it and accept trades.
Using crypto to profit from death
Even though the market involved potential death, Kalshi promoted it on social media for days. Users wagered $54 million on it.
US Senator Chris Murphy called it “insane this is legal.”
Ex-SEC Chief of Staff Amanda Fischer told NPR that prediction markets are “promoting opportunities to bet on events that can only be seen as a proxy for war or assassination… this betting market shouldn’t exist in the first place”
Six Democratic senators had already urged the CFTC in late February to ban contracts tied to anyone’s death. Wagers on Khamenei’s killing made their letter prophetic.
On Polymarket, Kalshi’s less-regulated offshore competitor, the numbers were uglier.
Roughly half a billion dollars changed hands on contracts tied to when US forces would strike Iran which, again, has obvious ramifications on human life.
Crypto keeps building death markets
Sadly, crypto wagers on death are nothing new. Early concepts of cryptographic assassination markets have circulated since at least a 1995 essay by cypherpunk Jim Bell.
In 2018, crypto prediction platform Augur launched with assassination markets appearing almost immediately.
Read more: Lord Miles wants YouTubers to help settle Polymarket scandal
In September 2025, Polymarket hosted a multimillion-dollar market on whether YouTuber Lord Miles would survive a 40-day desert fast . Trading odds crashed when fears spread that he had actually died.
Hivemind progenitor Paul Sztorc repeated his multi-year call for a “fully peer-to-peer prediction market system that cannot be shut off by anyone under any circumstances.”
More recently, in January 2026, an anonymous Polymarket trader made $400,000 on a suspiciously well-timed bet on Venezuelan leader Nicolás Maduro’s downfall.
In February, Israeli authorities indicted two people for using IDF classified information to bet on Polymarket during military conflict last June between Israel and Iran.
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Source: https://protos.com/kalshi-uses-death-carve-out-to-avoid-paying-out-on-ali-khamenei-ousting/
