Prediction market platform Kalshi is facing a class action lawsuit over alleged disclosure failures related to a market predicting the removal of Iran’s Supreme Leader Ali Khamenei.
The lawsuit claims that the platform did not properly inform users about a “death carveout” rule that affected the outcome and payouts of the market.
According to the plaintiffs, the carveout policy was not clearly incorporated into the user-facing rules summary and was not displayed in a way that a reasonable user would notice or understand. As a result, some traders believe they were unfairly denied payouts on winning positions.
The legal filing also states that Kalshi later acknowledged that its earlier disclosures were “grammatically ambiguous,” which may have contributed to user confusion.
The case highlights growing scrutiny of prediction market platforms and raises broader questions about transparency, user protection and rule clarity in emerging online trading markets.
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