Coinbase Sues Michigan, Illinois, and Connecticut Over Prediction Market Regulation
Coinbase has filed lawsuits in opposition to the US states of Michigan, Illinois, and Connecticut, escalating a rising authorized battle over who has the authority to manage prediction markets within the United States.
Key Takeaways:
- Coinbase is difficult state authority over prediction markets, arguing they fall beneath CFTC jurisdiction.
- The lawsuits observe Coinbase’s Kalshi partnership forward of a 2026 US launch.
- States declare prediction markets resemble playing, a view Coinbase rejects.
According to a Bloomberg report, Coinbase stated the three states have both taken motion or threatened to behave in opposition to prediction market operators, regardless of missing the authorized authority to take action.
The alternate stated it’s searching for courtroom orders to affirm that prediction markets fall beneath the unique jurisdiction of the Commodity Futures Trading Commission (CFTC), not state gaming regulators.
Coinbase Lawsuit Follows Kalshi Deal Ahead of 2026 Prediction Market Launch
The lawsuits come at some point after Coinbase introduced plans to supply event-based contract buying and selling via a partnership with Kalshi, a CFTC-regulated prediction markets platform.
According to courtroom filings, Coinbase plans to roll out prediction market entry to U.S. prospects beginning in January 2026, together with in Illinois.
Coinbase Chief Legal Officer Paul Grewal stated the circumstances are supposed to make clear a degree the corporate views as settled legislation.
“Prediction markets fall squarely beneath the jurisdiction of the CFTC, not any particular person state gaming regulator,” Grewal stated in a publish on X.
He argued that state-level efforts to dam or management these markets undermine innovation and battle with federal legislation.
In its Illinois submitting, Coinbase warned that state interference might trigger “instant and irreparable” hurt to its enterprise.
The firm is searching for each declaratory and injunctive aid to stop enforcement actions whereas the courts weigh the difficulty.
At the middle of the dispute is whether or not prediction markets, notably these tied to sports activities outcomes, must be handled as playing.
Several states have argued that event-based contracts resemble unlicensed sports activities betting, inserting them beneath state jurisdiction.
Coinbase disputes that framing, saying prediction markets function as impartial exchanges that match consumers and sellers fairly than setting odds for revenue.
Grewal additionally pointed to Congress’s definition of commodities, noting that lawmakers excluded solely a slender record of things from CFTC oversight, akin to onions and field workplace receipts.
By that logic, he stated, sports-related occasion contracts stay inside the company’s remit.
Connecticut Targets Kalshi and Robinhood
The lawsuits observe latest enforcement actions by Connecticut regulators, who earlier this month issued cease-and-desist orders to Kalshi, Robinhood and Crypto.com.
Kalshi challenged the transfer in courtroom and won temporary relief after a federal choose paused state enforcement whereas the case proceeds.
As reported, crypto exchanges and platforms are accelerating their push into prediction markets, with Gemini and PancakeSwap emerging as the most recent gamers to roll out new choices.
Rivals such as Coinbase and Crypto.com have additionally been exploring comparable expansions as competitors intensifies.
The publish Coinbase Sues Michigan, Illinois, and Connecticut Over Prediction Market Regulation appeared first on Cryptonews.
