Overview
- Coinbase filed federal complaints on Dec. 19 seeking declaratory and injunctive relief that event contracts fall under the Commodity Exchange Act and the CFTC’s exclusive jurisdiction.
- The actions respond to recent steps by regulators in the three states, including cease‑and‑desist letters that classify certain prediction markets, particularly sports contracts, as illegal gambling.
- Coinbase argues Congress defined commodities broadly with only narrow exclusions, contending that event-based contracts are derivatives rather than wagers.
- Chief Legal Officer Paul Grewal says prediction markets function as neutral matching exchanges, distinguishing them from sportsbooks that set odds and profit from customer losses.
- Earlier cases involving Kalshi have yielded mixed rulings in state and federal courts, signaling protracted litigation and potential appellate review as Coinbase prepares a January 2026 launch through Kalshi.