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Kalshi faces $54M lawsuit over Khamenei prediction market

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Kalshi faces $54M lawsuit over Khamenei prediction market

Kalshi faces a class-action lawsuit over disputed payouts totaling approximately $54 million related to bets on Iranian Supreme Leader Ali Khamenei’s departure from office.

Summary

  • Kalshi faces a $54M class-action lawsuit over disputed Khamenei bets.
  • Traders say the platform retroactively excluded death-based outcomes.
  • Kalshi argues the death exclusion existed from the market’s launch.

Users who wagered Khamenei would leave his position before March 1 claim the prediction market platform retroactively applied a rule excluding death-based outcomes after he was killed in weekend military strikes.

The company maintained its terms explicitly prohibiting trading on death scenarios from the market’s inception and reimbursed millions in fees and losses to affected traders.

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The lawsuit filed in U.S. District Court for the Central District of California accuses Kalshi of applying the exclusion only after the outcome materialized, calling the practice deceptive.

Khamenei died Saturday during joint U.S.-Israeli military operations that killed hundreds including senior Iranian officials following months of American force deployment to the region.

Platform continued accepting trades as death reports emerged

The complaint alleges Kalshi allowed trading to continue even after information about Khamenei’s death began circulating.

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Plaintiffs argue the market’s original terms clearly stated his office departure could result from any circumstance, making the payout conditions straightforward.

The 85-year-old leader’s removal from power through death was the most probable scenario given the military tension, according to the lawsuit.

American naval forces had assembled near Iran while armed conflict appeared increasingly inevitable. This had created conditions where Khamenei’s death became the realistic path for his office departure rather than resignation or other peaceful transitions.

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Company claims death exclusion existed from market launch

Kalshi representatives said the platform took every precaution to prevent trading on death outcomes when creating the market.

The terms included explicit language barring death-based resolution from the beginning rather than being added later, according to the company’s statement.

Prediction market platforms have grown notably since the 2024 presidential election when their probability calculations outperformed traditional polling in forecasting Donald Trump’s victory.

These services let users purchase yes-or-no contracts on future events like political developments, sporting competitions, and economic indicators.

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Crypto World

Circle Stock Surges As Bernstein Sees Upside From Stablecoins

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Circle Stock Surges As Bernstein Sees Upside From Stablecoins

Circle Internet Financial is among Wall Street’s best-performing stocks so far in 2026, and analysts at Bernstein believe the rally could continue as stablecoin adoption accelerates.

In a recent note to clients, Bernstein reiterated its “Outperform” rating on CRCL stock and set a $190 price target, which typically reflects analysts’ expectations for a stock over the next 12 months.

Despite a volatile end to 2025, Circle shares appear to have decoupled from the broader cryptocurrency market, which has been under pressure since October following a major leveraged liquidation event.

Since bottoming near $50 a share in early February, the share price has more than doubled. The shares closed Tuesday at $118.17, up 5.7%, giving the company a market capitalization of roughly $30.3 billion.

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Circle shares are now up about 49% year to date, outperforming a flat S&P 500 index and a roughly 1% decline in the Nasdaq 100 index over the same period.

Based on Bernstein’s price target, Circle shares still have 60% upside from current levels.

Circle (CRCL) stock. Source: Yahoo Finance

Related: Circle moves toward privacy-focused stablecoin with USDCx project

Stablecoin adoption drives bullish outlook for Circle

Bernstein’s bullish outlook for Circle is largely tied to the rapid adoption of stablecoins, particularly as businesses gain clearer rules for using digital dollars in the United States.

That clarity came with the GENIUS Act, passed in 2025, which established a federal regulatory framework for stablecoins. The law set standards for reserve backing, disclosures and oversight, giving companies clearer guidelines for issuing and using dollar-pegged tokens.

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Circle stands to benefit directly from that shift. Its USDC (USDC) stablecoin is the world’s second-largest, with roughly $78 billion in circulation, accounting for about one-quarter of the global stablecoin market, according to DeFiLlama.

USDC’s total circulation. Source: DeFiLlama

Circle has also built credibility among traditional financial institutions. The company went public in 2025 and works with several major Wall Street companies.

BlackRock manages the Circle Reserve Fund that holds much of USDC’s backing assets, while BNY Mellon serves as a primary custodian for those reserves. Circle has also attracted investments from major institutions, including Fidelity and Goldman Sachs, reflecting growing interest in stablecoin infrastructure from traditional finance.

Related: Crypto’s 2026 investment playbook: Bitcoin, stablecoin infrastructure, tokenized assets