Kalshi and Polymarket Seek $20B Valuations as Insider Trading Scandal Tests Prediction Market Legitimacy
By Verse Press Research Desk | March 7, 2026
Both Kalshi and Polymarket are in early talks to raise new funding rounds that would value each platform at approximately $20 billion, roughly double their late-2025 valuations, the Wall Street Journal reported Friday. The fundraising discussions come at an awkward moment: both platforms are under congressional scrutiny and facing questions about suspicious trading ahead of US-Israel airstrikes on Iran in late February.
The two companies operate under fundamentally different regulatory frameworks. Kalshi is the first CFTC-approved prediction market exchange in the United States, subject to federal oversight and legally accessible to US users. Polymarket, by contrast, is not registered with US regulators and is legally inaccessible to US-based participants. That distinction shapes the regulatory stakes facing each company in the months ahead.
The Numbers Behind the Valuations
Kalshi's last publicly confirmed valuation was $11 billion, reached after closing a $1 billion funding round in December 2025. Before that, the company was valued at $5 billion as recently as October 2025. Polymarket was valued at $9 billion in October 2025 after Intercontinental Exchange (ICE) committed up to $2 billion in investment.
People familiar with both companies' fundraising processes told the Journal that discussions remain preliminary and may not result in closed deals at those target figures.
The ask is not without foundation in operating metrics. Kalshi's annualized revenue run rate has reached approximately $1.5 billion, according to sources cited by the WSJ. Weekly trading volume is roughly comparable across both platforms, at approximately $1.87 billion for Kalshi and $1.9 billion for Polymarket.
Kalshi reports over $400 million in open interest; Polymarket reports $360 million. Polymarket has also reported more than 30 million global users, a scale indicator that investors are likely weighing alongside revenue figures.
The sector has grown dramatically in recent years. During the 2024 US presidential election cycle alone, $3.2 billion was traded on Polymarket. That surge in volume has drawn major financial platforms into the space: Coinbase, Robinhood, Nasdaq, and Cboe have entered or are actively exploring entry into prediction markets, lending credibility to the $20 billion valuation ambitions now on the table.
The Iran Controversy
On-chain analytics firm Bubblemaps identified six wallets that collectively netted roughly $1 million in profits by betting that the US would strike Iran by February 28. The airstrikes occurred on that date. Most of those wallets were funded within 24 hours of the actual strikes.
A trader identified by NPR as "Magamyman" made $553,000 betting on the removal of Iran's supreme leader Ali Khamenei, a distinct contract from the strike markets themselves. That trader placed their first bet 71 minutes before news of the strikes became public, at a time when the market was pricing the event at just 17% probability.
In Israel, two individuals, one a military reservist and the other a civilian, were indicted for using classified information to place bets on Polymarket tied to the Iran operations, according to the Times of Israel.
Total volume traded on Iran-related contracts reached $529 million on Polymarket and $50 million on Kalshi. The significant disparity reflects the difference in each platform's overall user base and global reach, with Polymarket's offshore structure giving it access to a broader international audience.
Polymarket defended the existence of such contracts, saying prediction markets serve a forecasting function. Kalshi took a different approach and implemented what it calls a "death carveout" policy, blocking direct profit from contracts involving assassinations, war, or terrorism. The company also reimbursed net losses to traders who held positions on Iran-related outcomes. Federal regulations already bar futures contracts based on assassinations, war, or terrorism, raising questions about whether Kalshi's policy represents a voluntary stance or compliance with existing rules. That question is addressed more directly in the congressional and regulatory responses discussed below.
Congressional Response
Legislators moved quickly. Senators Jeff Merkley (D-OR) and Amy Klobuchar (D-MN) introduced a bill on March 5 to prohibit lawmakers and executive branch officials from trading on prediction markets, with fines starting at $10,000 per violation and a requirement to forfeit any profits.
Senator Adam Schiff (D-CA) and colleagues separately asked the CFTC to ban event contracts tied to physical injury, death, or military conflict.
CNN noted that federal regulations already bar futures contracts based on assassinations, war, or terrorism, creating a direct question about whether existing rules apply to prediction market contracts on those same events.
The CFTC has signaled imminent rulemaking in the prediction market space, according to a February analysis from Sidley Austin. A House bill, H.R. 7004, titled the Public Integrity in Financial Prediction Markets Act of 2026, has been filed in the House.
Kalshi is separately facing a class-action lawsuit alleging that it failed to pay out $54 million to traders on certain market outcomes. The suit is a civil matter proceeding independently of the congressional activity described above.
What This Means Outside the US
For users in Africa and South Asia, the regulatory cloud over these platforms has real consequences.
Polymarket currently restricts nine African countries outright, primarily on sanctions and anti-money-laundering grounds, but leaves roughly 45 others unrestricted. Nigeria, Kenya, Ghana, and South Africa, all among the highest crypto adoption nations globally per Chainalysis data, currently have access. Polymarket operates on the Polygon blockchain and currently settles positions in bridged USDC (USDC.e), a dollar-pegged stablecoin widely used across Africa for remittances and savings. The platform announced a partnership with Circle in early 2026 to transition to native USDC settlement, a distinction relevant to users accustomed to the bridged version. Kalshi's CFTC-regulated status gives it a materially different geographic access profile, and its specific restrictions for non-US and African users warrant independent verification before drawing direct comparisons with Polymarket's access policies.
In high-inflation economies, the ability to hold or speculate in dollars through a familiar interface carries practical appeal beyond just prediction, as analysts have noted.
In South Asia, India represents one of the largest Polymarket user bases in Asia. The Polymarket interface currently lists 112 active markets tied to India and Pakistan-related events, as of the research date, though that figure may fluctuate.
A successful $20 billion fundraise would likely accelerate geographic expansion, but could equally trigger a compliance-driven tightening of access for users in markets without clear regulatory infrastructure of their own. Legal observers have noted that CFTC-driven geofencing regulations could spill into international operations, threatening access for African and South Asian users who have no domestic regulatory body positioned to advocate for their interests.
The insider trading revelations are particularly corrosive for emerging market users. The central pitch of prediction markets is that aggregate bets reflect real-world probabilities more accurately than polls or pundits. If well-connected insiders can systematically front-run those markets on life-and-death geopolitical events, the informational value of price signals collapses, and the platforms lose their primary justification.
What Comes Next
Both platforms continue operating at high volume despite the controversy. Whether the $20 billion funding rounds close depends significantly on how regulators respond in the next few months. A restrictive CFTC rulemaking on event contracts involving conflict or death could directly constrain some of the highest-volume market categories seen in recent months.
Conversely, the current US administration has been broadly characterized as taking a deregulatory posture toward crypto, and a permissive regulatory environment could clear the path for continued expansion.
Investors considering these rounds are placing a bet of their own: that prediction markets become permanent financial infrastructure, and that the current controversy is turbulence rather than a structural threat.