$500 million betting frenzy: Crypto bets on Khamenei’s fate puts Trump linked Polymarket under lens

Hours before Iran’s Supreme Leader, Ali Khamenei, was killed in strikes carried out by the United States and Israel, millions of dollars had already been wagered on whether he would soon be “out of power.” 

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According to NPR, one trader alone reportedly made more than $553,000 (around ₹4.6 crore) by betting that

Khamenei would lose power. 

What happened on Polymarket? 

On the cryptocurrency-based prediction platform Polymarket, users can bet on real-world events by buying “YES” or “NO” shares on outcomes such as elections, wars, or leadership changes. Each winning share pays $1 if the predicted outcome occurs. 

In the days leading up to the strikes, hundreds of millions of dollars flowed into Iran-related markets on the platform. Analysts estimate that more than $500 million was traded on contracts tied to potential attacks and leadership changes in Iran. (Reuters) 

Blockchain analytics firm Bubblemaps claimed in a post on X that suspicious trading activity had been detected. 

The firm wrote: “Six suspected insiders made $1.2M betting on a US strike on Iran.” 

According to the analysis, several wallets were funded shortly before the event, specifically bet on February 28, and purchased “YES” shares just hours before the strikes took place. The findings raised concerns that some traders may have had access to information before it became public. 

The ‘Magamyman’ profits 

One Polymarket account operating under the name “Magamyman” has drawn particular attention. 

Blockchain records suggest the wallet invested $235,947 (around ₹2.16 crore) when shares predicting a strike were trading at 27 cents, implying only a 27% probability. 

After the strikes were confirmed, the position reportedly returned more than $431,146 (around ₹3.9 crore). 

In a separate market predicting that Khamenei would be out of power, the same account is believed to have earned over $553,000 (around ₹4.6 crore). 

Why Trump’s name is involved 

The controversy gained political traction partly because Donald Trump Jr. sits on Polymarket’s advisory board, and his investment firm has previously backed the company. 

While this connection does not prove any wrongdoing, critics say it raises questions about the intersection of political power and platforms that allow betting on geopolitical events. 

U.S. Senator Chris Murphy wrote on X: “It’s insane this is legal. People around Trump are profiting off war and death.” 

Murphy said he plans to introduce legislation on the issue “ASAP.” 

There is no verified evidence that Donald Trump personally profited from the trades. 

Kalshi’s response 

The US-regulated prediction market Kalshi also saw heavy trading, with more than $50 million placed on contracts predicting whether Khamenei would be “out.” (AOL) 

During the surge in activity, Kalshi posted: “BREAKING: The odds Ali Khamenei is out as Supreme Leader have surged to 68%.” 

The company also clarified that its rules prohibit markets that settle directly on death. 

“Reminder: Kalshi does not offer markets that settle on death. If Ali Khamenei dies, the market will resolve based on the last traded price prior to confirmed reporting of death.” 

After his death was confirmed, Kalshi halted trading on the contract. 

Co-founder Tarek Mansour said the platform structures its markets to avoid profiting from someone’s death. 

“We don’t list markets directly tied to death. When there are markets where potential outcomes involve death, we design the rules to prevent people from profiting from death.” 

Some users, however, criticised how the market was settled. 

The bigger debate 

The episode has triggered a broader debate about the ethics and regulation of prediction markets. 

Six Democratic senators have urged regulators to act against contracts that “incentivize physical injury or death.” 

Amanda Fischer of Better Markets told NPR that such platforms create opportunities to bet on events that effectively function as proxies for war or assassination. 

For now, while several traders appear to have made large profits from markets linked to Khamenei’s removal, there is no evidence that Donald Trump personally benefited from the bets.