Prediction market trader ‘Magamyman’ made $553,000 on the death of an Iranian official.

A trading account under the name “Magamyman” made more than $550,000 betting on the speculation market Polymarket that Iran’s Supreme Leader, Ayatollah Ali Khamenei, would be deposed shortly before an Israeli strike killed him on Saturday.

These transactions have drawn scrutiny from members of Congress and critics of the speculative markets, who say the platforms invite people to obtain different information to profit from deadly military operations. On Polymarket alone, half a billion dollars were sold over the exact moment the US military was going to drop bombs on Iran.

“This madness is legal,” Sen. Chris Murphy (D-Conn.) wrote on X. “People around Trump are profiting from war and death,” he said, adding that he plans to introduce legislation “asap” to ban this type of activity.

The White House has denied anyone in Trump’s path is behind the lucrative trade.

The Trump family, however, has ties to Polymarket. Donald Trump Jr., the president’s son, is an adviser to Polymarket and his financial company 1789 Capital invested millions in the controversial business. The Trump administration has dropped two federal investigations into Polymarket that were opened by President Joe Biden’s administration.

A screenshot of the Polymarket seller’s page, showing a successful bet during the US strike on Iran.

NPR

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NPR

This last part is fueling the debate about how governments and internal forces can monetize government secrets.

In January, an anonymous trader made hundreds of thousands of dollars by placing suspiciously well-timed bets ahead of the arrest of Venezuelan president Nicolás Maduro. A month later, authorities in Israel charged two people with using classified information to place bets on Polymarket about an impending attack on Iran when the countries fought a 12-day war last June.

The millions flowing into the market linked to the impeachment of Iran’s president were created on an overseas exchange operated by Polymarket, meaning it is beyond the reach of regulators in Washington.

The Trump administration has given Polymarket permission to open a US platform, but it has yet to begin publicizing it. Most American sellers who use Polymarket access the site through a private network that protects the user’s identity and location.

Many futures markets, which have grown in popularity in recent months, are regulated by the Commodity Futures Trading Commission. The agency considers this new-fangled form of betting a “futures contract,” not a form of gambling.

Under US trade laws, making trades based on death and war is illegal, as those types of bets create a financial reward for violence, human suffering and political instability.

This commitment was shown over the weekend in the way that one major prediction market, Kalshi, responded to the market tied to when Khamenei would leave, a prospect that attracted more than 54 million dollars.

When Khamenei’s death was confirmed, those who placed bets on Kalshi for the leader’s ouster expected compensation, but it never happened. Instead, trading on the market was temporarily halted while the company conducted “another assessment of the situation.”

Later, Kalshi CEO Tarek Mansour wrote on X that the company would return the money collected from Khamenei’s market.

“We do not write markets tied to death,” Mansour wrote. “If there are markets that have potential consequences involving death, we create laws to prevent people from profiting from death. That’s what we did here.”

In messages sent to users who placed bets before and after the death of the Iranian president, Kalshi said it would offer a minimum amount of money up to the last price of the sale before his death was confirmed, so it did not violate US laws that prohibit markets where people can profit from death and murder.

Kalshi’s decision caused an uproar among the traders, who felt that they had been cheated.

They were all the more outraged to see the company promote Khamenei’s market for days on social media.

“Troubling the 100% truth assumption because of a text-printed ‘mortality’ is a beast,” said a user who goes by “pepe” on the online Discord forum for Kalshi merchants. “Centralized oracles will always stoop to imitation over truth.”

Others were less generous, mocking Kalshi’s actions in Khamenei’s market as proof that the platform is a “scam.”

Amanda Fischer, a former head of the Securities and Exchange Commission who now works for the financial reform group at Better Markets, told NPR that Congress must act to stop “the perverse incentives and violence that results from betting on death and destruction.”

He added: “Speculation markets are promoting betting opportunities on events that can only be seen as a proxy for war or killing. The confusion and outcry over how brokers linked to Khamenei would settle confirms that this betting market should not exist in the first place.”