Coinbase files lawsuits in 3 states over attempts to regulate prediction markets

Policy Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Coinbase files lawsuits in 3 states over attempts to regulate prediction markets The crypto exchange is taking legal action against Connecticut, Michigan and Illinois, Chief Legal Officer Paul Grewal wrote on X. By Jamie Crawley | Edited by Sheldon Reback Dec 19, 2025, 10:09 a.m. Coinbase is taking legal action in Connecticut, Michigan and Illinois over the three states' attempts to regulate prediction markets. (Jesse Hamilton, modified by CoinDesk) What to know : Coinbase sued Connecticut, Illinois and Michigan over the three states' attempts to regulate prediction markets. The crypto exchange filed lawsuits to "confirm what is clear," Chief Legal Officer Paul Grewal wrote in a post on X on Friday: that prediction markets fall under the jurisdiction of the CFTC. Prediction markets enable users to speculate on the outcome of future events by buying shares in contracts pegged to the potential results. State gaming regulators are flexing their muscles to prevent such services being offered on the basis they are a form of gambling. Coinbase (COIN), the crypto exchange that plans to add prediction markets to its platform, is taking legal action in Connecticut, Illinois and Michigan over the states' attempts to regulate those markets. The company filed lawsuits to "confirm what is clear," Chief Legal Officer Paul Grewal wrote in a post on X on Friday : that prediction markets fall under the jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC) and not individual state gaming regulators. STORY CONTINUES BELOW Don't miss another story. Subscribe to the State of Crypto Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy . Prediction markets let users speculate on events by buying shares in contracts pegged to potential outcomes such as the winner of a boxing match or central bank interest-rate decisions. Coinbase on Wednesday announced plans to incorporate prediction markets , initially through integrating Kalshi. State gaming regulators are attempting to flex their muscles to prevent such services being offered on the basis they are a form of gambling. "State efforts to control or outright block these markets stifle innovation and violate the law," Grewal wrote. "Prediction markets are fundamentally different from sportsbooks. Casinos win only if you lose and set odds to maximize their profits," he added. "Prediction markets are neutral exchanges, indifferent to price, that match buyers and sellers." The markets are classed as a form of derivative because their value depends on the outcome of a future event. Congress deliberately excluded certain specific underliers from its definition of a commodity, making it clear that everything else falls within the CFTC's purview, according to Grewal. "Coinbase brings this action to prevent Defendants from unlawfully applying Illinois gambling laws to federally regulated transactions that are subject to uniform federal law under the exclusive jurisdiction of the CFTC," the exchange's filing in Illinois dated Dec. 18 said . Coinbase Prediction Markets Connecticut Michigan Illinois lawsuits More For You Protocol Research: GoPlus Security By CoinDesk Research Nov 14, 2025 Commissioned by GoPlus What to know : As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M. GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month. Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B. View Full Report More For You Senate confirms Trump crypto-friendly nominees to take over CFTC, FDIC By Jesse Hamilton | Edited by Nikhilesh De 8 hours ago In a package of confirmations, the U.S. Senate approved Mike Selig to lead the CFTC and Travis Hill to run the FDIC, both with major potential reach into crypto. What to know : The U.S. Senate moved to confirm a massive package of President Donald Trump's nominees on Thursday, including two officials with important regulator roles over the crypto sector. The chamber approved the confirmations of Mike Selig to run the Commodity Futures Trading Commission and Travis Hill to lead the Federal Deposit Insurance Corp. Selig will have a leading role as a crypto watchdog, replacing Acting Chairman Caroline Pham, who has been pushing an aggressive crypto policy agenda in the absence of a permanent agency chief. Read full story Latest Crypto News Latest bitcoin bull turns bear, Fidelity director warns of year-long crypto winter 9 minutes ago Metaplanet to start sponsored ADR program to woo over-the-counter U.S. investors 34 minutes ago Bybit returns to UK with 100 crypto trading pairs after 2-year break 1 hour ago XRP higher after early dip as buyers step in near $1.80 5 hours ago Crypto breaks higher as BOJ decision clears a macro overhang 5 hours ago Bitcoin jumps above $87,000, yen slides as Bank of Japan hikes interest rates 6 hours ago Top Stories Bitcoin jumps above $87,000, yen slides as Bank of Japan hikes interest rates 6 hours ago Senate confirms Trump crypto-friendly nominees to take over CFTC, FDIC 8 hours ago Latest bitcoin bull turns bear, Fidelity director warns of year-long crypto winter 9 minutes ago What if crypto's U.S. market structure effort just never gets there? 14 hours ago Crypto breaks higher as BOJ decision clears a macro overhang 5 hours ago Metaplanet to start sponsored ADR program to woo over-the-counter U.S. investors 34 minutes ago