Kalshi CEO defends Khamenei market design after backlash, says platform will reimburse all fees

Kalshi CEO Tarek Mansour defended the platform's handling of a prediction market contract concerning Iran's Supreme Leader Ali Khamenei, who recently died. Mansour stated that Kalshi designs rules to prevent profiting from death, explaining that under the CFTC-filed terms, the market would settle at the last traded price before death, not a binary payout. Traders who entered positions after Khamenei's death will receive full refunds of their entry costs. The settlement process faced backlash due to ambiguity between the CFTC-filed terms ("last traded price (prior to the death)") and the market page ("last traded price prior to confirmed reporting of death"), which allowed for active trading during the gap between his actual death and public confirmation. Critics, including former SEC staff, accused Kalshi of promoting a proxy market on assassination, especially after the platform promoted the surging odds while reports circulated. Furthermore, critics pointed to an inconsistency where a prior market on Jimmy Carter's status settled to "No" upon his death, contrasting with the Khamenei market's carve-out. Mansour argued the Khamenei market had legitimate geopolitical relevance. This controversy occurs as Democratic senators urged the CFTC to ban contracts tied to death, following similar issues with Polymarket contracts.

(Source：The Block)