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After billions in bets on a U.S.\u2013Iran strike and an insider scandal on platforms like Polymarket, Democrats push the DEATH BETS Act, targeting prediction markets that trade on war, terror and death.<\/p>\n
\n Summary<\/span>\n <\/p>\n <\/p>\n Prediction markets just ran into Washington\u2019s moral panic. After a record surge in trading linked to the U.S.\u2013Iran conflict, a senior Democrat is now moving to shut down the sector\u2019s most controversial edge: markets that price war, terrorism and death.\u200b<\/p>\n For the week ending March 9, on-chain and regulated prediction venues blew through previous activity highs. Data compiled by Cointelegraph shows nominal volume on Polymarket hit 2.49 billion dollars over the period, while CFTC\u2011regulated Kalshi posted 2.85 billion dollars, pushing the total nominal volume across all prediction platforms to 14.5 billion dollars and lifting unique users to 2.8 million. The trigger was obvious: escalating U.S.\u2013Iran tensions<\/a>, with traders aggressively pricing the odds of an American strike.<\/p>\n That set up the political backlash. U.S. Democratic senator Adam Schiff has introduced<\/a> the so\u2011called \u201cDEATH BETS Act,\u201d a bill that would amend the Commodity Exchange Act to explicitly bar federally regulated prediction markets from listing contracts tied to war, terrorism, assassinations, or individual deaths. Regulators have long had discretion over \u201cevent contracts,\u201d but this proposal would hard\u2011code a bright red line around anything that looks like trading on human catastrophe.<\/p>\n <\/p>\n Schiff\u2019s move also follows a very specific scandal. Six Polymarket<\/a> users are accused of using insider information to place roughly 1 million dollars\u2019 worth of winning bets on the timing of a U.S. strike on Iran, crystallizing the sector\u2019s worst optics: privileged actors monetizing sensitive, potentially classified information while the rest of the market thinks it is trading \u201cpure information.\u201d For critics, that episode proves prediction markets are not just forecasting tools, but a new venue for front\u2011running geopolitics.\u200b<\/p>\n For crypto\u2011native prediction platforms, the message is brutal. Volumes<\/a> are finally at institutional scale, but the order flow driving that growth is clustering in precisely the categories now being lined up for prohibition. If the DEATH BETS framework becomes a template for other regulators, the sector will be pushed toward more anodyne contracts\u2014macro data, elections, sports\u2014while the most informationally rich, liquidity\u2011dense markets migrate fully offshore or into gray\u2011zone DeFi. In market terms, Washington is saying the quiet part out loud: some kinds of \u201ctruth markets\u201d will not be allowed to clear.<\/p>\n <\/p><\/div>\n\n\n
Polymarket death markets gain scrutiny from lawmakers<\/h2>\n