Kalshi Faces Lawsuit Over Ayatollah Khamenei Prediction Market Resolution

Kalshi is facing a class action lawsuit concerning the resolution of a prediction market regarding Ayatollah Ali Khamenei's status as Supreme Leader by March 1. According to NS3.AI, the market experienced over $54 million in trading volume. Plaintiffs anticipated receiving $1 per share for 'yes' contracts following reports from multiple outlets confirming Khamenei's death on February 28. However, Kalshi applied a 'death carveout,' paying based on the last traded price instead. The lawsuit alleges inadequate disclosure of the carveout and seeks compensatory and punitive damages. Kalshi maintains that it adhered to clear rules, reimbursed all fees and net losses, and asserts that no trader incurred financial losses.