Breaking! The two giants of the prediction market are "clashing" on Washington streets. Under the threat of war contracts and regulatory swords, where will $BTC and $ETH go?

In March, a prominent advertisement appeared at bus stops in Washington, D.C., with the slogan “We don’t run a death market.” This was not a public-service announcement, but a direct attack by U.S. prediction market platform Kalshi on its competitor, Polymarket—intended to underscore Kalshi’s compliance as a federally regulated entity while also insinuating that its rival operates overseas and is involved in sensitive contracts related to military conflicts.\n\nAs competition in the industry intensifies and regulatory scrutiny tightens, tensions between these two leading platforms have escalated from simmering undercurrents into open sparring. A senior executive at Kalshi, responsible for political and election markets, Benjamin Freeman, recently publicly accused Polymarket, saying it is “irresponsible, dangerous, and allegedly in violation of regulations,” adding that it is “threatening the survival space for legitimate prediction markets in the United States.”\n\nPolymarket responded immediately, saying it welcomes competition but that discussions should be grounded in facts, and that misleading the public would harm the entire industry. Kalshi spokesperson Elizabeth Diana fired back, arguing that a platform with major trading volume offshore and that even allows the existence of “death markets” is not qualified to talk about the industry’s interests. Here, the so-called “death market” refers to trading contracts tied to life-related events such as casualties and military conflicts.\n\nThe backdrop to this internal feud is the struggle between both sides for control of a rapidly growing market. According to data compiled on Dune Analytics, the two startups’ combined nominal trading volume has recently approached $60 billion, with successive new highs for weekly volume. Prediction markets are becoming a new channel for Americans to place bets on events like sports and elections.\n\nThe fundamental disagreement between the two sides lies in their operating model. Kalshi is headquartered in the United States and is regulated by the U.S. Commodity Futures Trading Commission (CFTC); Polymarket’s primary trading platform is overseas, which has enabled it to roll out contracts related to the Iran conflict and similar matters. Kalshi argues that products of this kind are neither ethical nor legal.\n\nA series of ads Kalshi ran in the Washington subway continued to apply pressure in the form of a “platform rules checklist.” One rule said: “We prohibit insider trading because Kalshi is a federally regulated U.S. exchange.” The implied message is self-evident.\n\nAt the same time, the U.S. Congress has turned its attention to the issue of insider trading in prediction markets—especially allegations that insider information from U.S. military actions is being used for betting. In response, Kalshi has taken tough measures such as fines and suspending trading. Under regulatory pressure, Polymarket has also recently published its own anti–insider-trading rules.\n\nKalshi’s spokesperson emphasized that it’s necessary to clarify the major differences between the two companies’ regulatory compliance paths, because the market often treats them as interchangeable. Polymarket, meanwhile, stated that its offshore main platform and its U.S. regulated platform, which is in the testing stage, both apply the same stringent market integrity standards, including bans on insider trading and market manipulation, and that it maintains communication with regulators.\n\nJust a few months ago, Kalshi cofounder Luana Lopez Larraz had also called on the industry to stop “destructive infighting” and develop together. Now, that vision has fallen flat. Especially after Kalshi’s adviser—and former CFTC commissioner—Brian Quintenz joined the fray, openly hinting that any investigations into insider trading should focus on Polymarket, the conflict between the two sides appears increasingly irreconcilable.

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