Coinbase’s head of litigation says states are “gaslighting” on prediction markets

CoinDesk News Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Coinbase’s head of litigation says states are “gaslighting” on prediction markets Ryan VanGrack says states are misrepresenting federal law as they move to block prediction markets. By AI Boost | Edited by Jennifer Sanasie Feb 27, 2026, 9:35 p.m. Make us preferred on Google Why it matters: Ryan VanGrack, Coinbase’s VP of legal and global head of litigation, is sharpening Coinbase’s challenge to state regulators, saying they are trying to rewrite Congress’ authority over derivatives. Coinbase has filed lawsuits in Connecticut, Illinois, Michigan and Nevada after launching prediction markets in partnership with Kalshi. Some of those states issued cease-and-desist letters or public warnings, arguing sports event contracts amount to illegal gambling. VanGrack said those actions left customers facing “real and imminent” threats that forced Coinbase to seek clarity in federal court. The argument: VanGrack says states are framing the issue incorrectly. Illinois officials argued in court that without state intervention, the markets would go unregulated due to limited CFTC resources. VanGrack called that claim “gaslighting,” saying the Commodity Futures Trading Commission has long overseen multi-trillion-dollar derivatives markets. He pointed to recent CFTC enforcement reminders around insider trading in event contracts as evidence the agency is actively policing the space. Federal vs. state power: At the center is who gets to regulate sports-related event contracts. VanGrack argued the Commodity Exchange Act grants the CFTC exclusive jurisdiction over swaps and derivatives, including event contracts. The law contains a “special rule” allowing the CFTC — not states — to prohibit gaming event contracts on public policy grounds. States are attempting to carve sports contracts out of the federal definition of swaps, a reading VanGrack said is unsupported by the statute’s text or precedent. Sports betting distinction: Coinbase says exchange-traded contracts differ fundamentally from sportsbook wagers. On a designated contract market like Kalshi, buyers and sellers set prices on an exchange overseen by the CFTC. In traditional sportsbooks, operators set odds and take the other side of the bet, a structure regulated by states. No one is arguing the CFTC regulates sportsbooks, VanGrack said — only that exchange-traded event contracts fall under federal derivatives law. Bigger stakes: The dispute mirrors broader crypto fights over fragmented oversight. VanGrack said states retain authority over consumer protection and fraud. But subjecting national derivatives markets to “a patchwork of 50 regulators” would undermine investor confidence and market stability. Congress long ago chose a unified federal framework for derivatives, he said, and prediction markets should be treated no differently. Media Network Interview Coinbase Prediction Markets AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . Más para ti McHenry predicts fast crypto deal as Witt brokers talks Por AI Boost | Editado por Jennifer Sanasie 9 feb 2026 Patrick McHenry and Patrick Witt told CoinDesk Live at Ondo Summit that crypto law momentum grows, even as disputes over yield and ethics continue to sharpen. Leer la noticia completa Latest Crypto News Citi and Morgan Stanley expand bitcoin and crypto custody, trading and tokenization efforts hace 2 horas Bitcoin's rebound cancelled as U.S. stocks fall, gold surges, amid mounting macro risks hace 4 horas Vitalik Buterin reveals his bold new plan to fix Ethereum’s scaling problem hace 5 horas Barclays looks for tech provider for new blockchain settlement engine: Bloomberg hace 5 horas Punters want crypto: UK Gambling Commission explores how to keep bettors on licensed sites hace 6 horas CoinDesk 20 performance update: Solana (SOL) falls 4.2%, leading index lower hace 7 horas Top Stories Bitcoin ETF holders and treasury firms stack protection against price crash below $60,000, Deribit says hace 14 horas The worst may lie ahead. Bitcoin chart revisits historic pattern. hace 9 horas U.S. regulator's GENIUS pitch casts dark cloud over crypto sector's stablecoin model hace 23 horas U.S. spot bitcoin ETFs set for biggest week in 6 after adding $1.1 billion in three days hace 11 horas Germany's AllUnity issues regulated stablecoin tied to safe haven Swiss franc hace 11 horas