Coinbase Legal Chief Challenges U.S. States Over Authority to Regulate Prediction Markets

Coinbase Vice President of Legal and Head of Global Litigation Ryan VanGrack said some U.S. state governments are misleading the public by misreading federal statutes to expand their authority over prediction markets, Odaily Planet Daily reports. After partnering with prediction market platform Kalshi to list related products, Coinbase filed lawsuits in Connecticut, Illinois, Michigan, and Nevada, where regulators had issued cease-and-desist orders or warnings asserting that sports event contracts amount to illegal gambling. VanGrack argued that the U.S. Commodity Exchange Act gives the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over derivatives markets and that prediction market products, including event contracts, are subject to federal oversight. He rejected claims that the market would be unregulated without state involvement, noting that the CFTC already supervises derivatives markets worth trillions of dollars and has issued guidance on insider trading in event contracts, while Coinbase emphasized that exchange-based prediction markets like those on Kalshi differ from traditional sports betting where operators set odds and take the opposite side of customer bets.