Written by: Mach , Foresight News

On February 28, the United States and Israel launched a joint airstrike against Iran, resulting in the death of Iran's Supreme Leader Ali Khamenei. This attack shook the geopolitics of the Middle East, and in the 21st century, the flames of war continue to spread, with its impact also creating huge waves in the prediction markets of the crypto world.

Polymarket and Kalshi became another "battleground" outside the main battlefield, with traders betting on the timing of attacks, regime change, and ceasefire dates, driving trading volumes to astronomical figures.

In war, there are always people who quietly make a fortune.

Polymarket has become a "barometer" of the conflict. Since last December, they have launched a marketplace for "when will the US strike Iran," covering a variety of date options.

The prediction market "Will Khamenei step down before February 28?" saw a single-day trading volume of $95.93 million on February 28, making it one of the largest geopolitical markets in the platform's history. Its trading volume reached $54.15 million on March 31.

After the attack was confirmed, the market quickly settled for "yes" (currently still in the final dispute period) because Khamenei's death directly led to his "resignation".

While Polymarket currently does not charge any transaction fees for the vast majority of conventional markets on its platform (including all political, geopolitical, popular culture, and long-term macroeconomic events), it introduced fees for specific high-frequency trading markets in early 2026. This expansion of its brand influence has had a significant positive impact on its revenue growth.

Furthermore, Polymarket Global Edition employs a profit-based fee model. Its core logic is that users do not pay transaction fees when placing orders, but when a user closes a profitable position, the platform charges a 2% commission on the net profit. This model only taxes the "winner."

Taking the chart as an example, if the winner's total net profit is $10 million, their revenue from a single forecast market alone would reach $200,000.

Traders flocked to these markets not only for the excitement, but also because they reflected news in real time—much faster than traditional media. Contract prices jumped instantly upon news of the attack, demonstrating the market's "efficiency."

There are always winners in war. In the past, those who profited from conflicts were often arms dealers, oil tycoons, or intelligence brokers—think of Lockheed during World War II or the oil moguls of the Cold War, who made fortunes through contracts and resource monopolies. Ordinary people? At best, they were bystanders; war meant loss and uncertainty for them. But now, the crypto prediction market has overturned this landscape. Platforms like Polymarket allow retail investors to bet on geopolitical events, from the date of US-Iran airstrikes to the probability of regime change, all with a few clicks.

However, participation in this game has blurred moral boundaries. This shift is striking: the "profits" of war have spread from physical supply chains to digital gambling tables. Arms dealers are still making money, but prediction markets have turned ordinary users into new players. They don't produce missiles, yet they can "predict" explosions on the blockchain and reap huge profits.

As conflicts escalate, platform transaction volumes surge, demonstrating the digitization of the war economy.

However, this has also raised many questions – will the thrill of making money diminish compassion for real suffering?

Kalshi, another player, also profited. Their "Will Khamenei step down?" market saw transactions ranging from tens of millions of dollars (slightly different depending on the source). On the day of the attack, the market saw a surge in transactions, reaching tens of millions of dollars in a single day.

However, Kalshi's handling of the situation sparked controversy. The platform's rules included a "no settlement for death" clause, meaning that if someone's departure was due to death, the full amount of the "yes" contract would not be paid.

Following the attack, Kalshi suspended its marketplace. CEO Tarek Mansour posted on X explaining that they oppose profiting from individual deaths, so settlements would be based on the price of the last transaction before the death, with a full refund of all fees. Mansour emphasized that this was to uphold "ethical principles" and prevent the platform from becoming a "death gamble." Some users complained that this seemed like a last-minute rule change, but Kalshi insisted that it was a pre-established clause, with details clarified only the day before the attack.

As a result, the platform lost money, but gained a reputation for "not making money off the dead".

Polymarket's high level of user anonymity has attracted global funding; Kalshi is more compliant, but it limits its market to war and assassination-related topics.

However, while most players are betting based on gut feeling, some insider players are quietly making a fortune.

On Polymarket, some accounts made bets so precisely that it raised suspicions of insider trading. Blockchain analytics firm Bubblemaps discovered that six newly created wallets bet on the February 28th US strike on Iran in the hours leading up to the attack, collectively profiting approximately $1 million.

These six wallets were all created in February of this year, with almost all trading concentrated on contracts predicting the timing of a US military attack. Some positions were established hours before the first reports of explosions in Tehran, with contract purchase prices as low as approximately $0.10. Analysts say that this concentrated betting activity before major geopolitical events resembles "suspected insider trading" in previous prediction markets.

However, the report also pointed out that the account in question had previously lost money in other predictions, and the US government had publicly warned weeks ago of possible military action, so the timing of the transaction alone is not enough to directly prove that there was any illegal activity.

These are not isolated incidents. Polymarket has faced similar scrutiny in the past, such as during the 2024 Super Bowl and the Venezuelan crisis. However, this case is on a larger scale, involving national security. The CFTC has warned of insider trading in the past, and Kalshi recently punished Artem Kaptur, an editor with the well-known YouTube creator MrBeast, for insider trading. Polymarket operates overseas, where regulation is lax, making it a gray area.

U.S. Representative Ritchie Torres is pushing for legislation called the "Public Integrity Act for Financial Prediction Markets of 2026," which aims to restrict government officials with access to non-public information from participating in related prediction market transactions. Meanwhile, Polymarket has faced regulatory restrictions or bans in several countries, including the Netherlands, France, Italy, and Singapore, in recent years.

Of course, not everyone wins. Many people bet on the wrong date and suffered heavy losses. Polymarket has now updated its website's top display, placing predictions related to the situation in Iran at the forefront.

Overall, this "war profiteering" has exposed the double-edged sword of prediction markets: on the one hand, they provide real-time data intelligence and insights; on the other hand, they are easily manipulated or exploited for insider information.

With the trend of betting on everything, future prediction markets may require stricter regulation and clearer rules. After all, the stakes are real money, and behind them are real lives.