Coinbase borrows Kalshi’s playbook, sues three states over prediction markets

Coinbase sued regulators in Connecticut, Illinois and Michigan, arguing CFTC-regulated prediction markets fall under federal commodities law, not state gambling rules.

Coinbase is taking three US states to court in a bid to lock in federal protection for its planned prediction markets, opening a new front in the battle over whether event contracts are finance or gambling.​

The exchange has sued regulators in Connecticut, Illinois, and Michigan, asking federal judges to declare that prediction markets listed on a US Commodity Futures Trading Commission (CFTC)-regulated platform fall under the Commodity Exchange Act (CEA) and the CFTC’s exclusive jurisdiction, not 50 separate state gambling codes.

In a Friday X post, chief legal officer Paul Grewal said Coinbase filed the cases “to confirm what is clear: prediction markets fall squarely under the jurisdiction of the @CFTC, not any individual state gaming regulator (let alone 50).”​

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