Dec. 19 at 1:33 PM
Coinbase is suing Michigan, Illinois, and Connecticut to block the application of state gambling laws to prediction markets, arguing that such markets fall under federal oversight by the Commodity Futures Trading Commission rather than state gaming regulators. The move follows Coinbase’s recent expansion into prediction markets as part of its strategy to become an “everything exchange,” alongside the launch of zero-commission stock trading.
Several other platforms, including Kalshi and Robinhood, are also facing similar regulatory disputes after states issued cease-and-desist letters related to event contracts. Coinbase says prediction markets differ fundamentally from sportsbooks, functioning as neutral exchanges that match buyers and sellers rather than profiting from customer losses.
Despite the headlines, Coinbase shares have had a weak week, down more than 10% amid broader cryptocurrency pressure as Bitcoin declined.
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