Coinbase Battles States Over Prediction Markets in Legal Showdown

Coinbase has filed cases against regulators in Connecticut, Illinois, and Michigan.

It asked federal judges to confirm that prediction markets operating on platforms supervised by the US Commodity Futures Trading Commission (CFTC) should fall under the Commodity Exchange Act.

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Coinbase argued that this federal law grants the CFTC full authority and leaves no room for state gambling rules to apply.

Chief legal officer Paul Grewal explained the company’s view in a post on X. He said the filings aim to make clear that prediction markets belong under the CFTC’s oversight, not under the separate control of multiple state gaming agencies.

Coinbase also warned that if each state can decide for itself whether a federally regulated market is considered gambling, the strictest rules could apply nationwide. The company noted that this would upset the balance between state and federal authority.

In its filings, Coinbase also points to how Congress defined “commodity” in the Commodity Exchange Act. The law excluded only a few items, such as onions and “motion-picture box-office receipts”.

The company argued that since politics and sports were not excluded, they fit within the broad definition of a commodity.

Coinbase recently selected former UK Chancellor of the Exchequer George Osborne to lead its Global Advisory Council. What did Osborne say? Read the full story.