Wall Street eyes $20 billion valuations for Polymarket and Kalshi: How Iran war bets triggered Washington’s 2026 crackdown

Wall Street firms are considering valuations of $20 billion for prediction market platforms Polymarket and Kalshi, driven by the potential of their data-generating capabilities. However, trading on events related to the Iran conflict – specifically, the timing of attacks and the fate of Khamenei – raised concerns about insider information and prompted scrutiny from lawmakers and the CFTC. Approximately $529 million was wagered on attack timing, and $150 million on contracts related to Khamenei, with some accounts profiting significantly. This led to legislative efforts by Rep. Mike Levin and Sen. Chris Murphy to regulate these markets, and the CFTC is preparing new rulemaking. The core issue is trust and fairness, as prediction markets rely on stable rules and prevent insider advantages, especially when dealing with sensitive geopolitical events. A dispute between Kalshi and its users over $54 million in winnings further highlights the need for clear regulations. Regulators are now considering how to balance the benefits of prediction markets with the risks of misuse and the potential for shaping the information environment.

(Source：CryptoSlate)