Kalshi Sued Over Refusing to Pay Out Prediction Market After Iran Leader's Death
Kalshi faces a lawsuit for using a 'death carveout' to resolve a prediction market on the Iranian leader's death, disappointing traders.Summary
Prediction market platform Kalshi is being sued in a California court over its handling of a market concerning the potential removal of Iranian Supreme Leader Ayatollah Ali Khamenei. Plaintiffs allege that Kalshi failed to pay out winning predictions following Khamenei’s death on February 28th, instead utilizing a 'death carveout' provision in its rules. This provision resolved the market based on the last traded price, resulting in payouts significantly lower than the expected $1 per share for those who correctly predicted the outcome. Kalshi CEO Tarek Monsour explained that the firm’s rules are designed to prevent profiting from death, and that the relevant caveats were present in the market rules and page, though he acknowledged room for improvement in user experience. While Kalshi reimbursed fees and net losses, plaintiffs are seeking compensatory and punitive damages, arguing the rules were not prominently disclosed. The market generated over $54 million in trading volume, with plaintiffs holding approximately $259.84 worth of positions.
(Source：Decrypt)