Kalshi CEO Tarek Mansour announced that the regulated prediction market platform would reimburse all fees on its "Khamenei out as Supreme Leader" market and settle positions based on the last traded price before Iranian Supreme Leader Ali Khamenei was killed in the US-Israeli strikes - a payout policy designed to prevent users from profiting directly from a death.
The market had attracted approximately $36 million in volume ahead of the strikes. Khamenei's death was confirmed by Iranian state media early Sunday morning; Iran declared 40 days of mourning.
The strikes began around 1:14 a.m. EST Saturday, when US missiles and Israeli aircraft hit targets in Tehran and several other Iranian cities, including Khamenei's compound.
Mansour said Kalshi would settle the "Khamenei out" market at the last price traded before the first strike and fully refund any positions opened after that moment. He said no user would lose money on the market.
Kalshi's Death Carveout Policy
Mansour framed the settlement as consistent with Kalshi's existing rules, not a retroactive change to them. He acknowledged that the market's death carveout - which prevents payouts triggered by a subject's death - was disclosed in the rules but said the platform needed to improve how those rules are surfaced in the user experience.
His statement drew some criticism from users who argued that a blanket prohibition on death-linked payouts makes geopolitical leadership markets structurally ambiguous.
Mansour responded that the difference between an oil futures contract - which functions as an indirect proxy for conflict - and a market that directly settles on a specific person's death is meaningful enough to maintain the distinction.
Polymarket's Parallel Activity
Rival platform Polymarket took a different approach, settling its "Khamenei out as Supreme Leader by March 31" market at 100% after confirmation.
That contract drew $45 million in volume and was one of the most-traded geopolitical markets in the platform's history. The top trader made approximately $757,000 on a Yes position.
Separately, blockchain analytics firm Bubblemaps flagged six Polymarket wallets that appear to have bet on a US strike hours before it occurred, collectively profiting around $1.2 million - a pattern the CFTC has previously warned could constitute insider trading violations in regulated prediction markets.
A broader "US strikes Iran by February 28" market on Polymarket had accumulated $529 million in total volume since opening in December.
Read next: XRP Bounces From $1.27 Panic Low But Key Resistance At $1.33 Threatens To Cap Any Recovery