Coinbase Escalates Legal Fight Over Prediction Market Jurisdiction

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Coinbase has initiated lawsuits against three US states, challenging their authority to regulate prediction markets. The exchange filed suits against Michigan, Illinois, and Connecticut on Thursday, seeking clarity on which regulator holds jurisdiction.

The legal actions request court orders declaring that prediction markets are under the exclusive oversight of the Commodity Futures Trading Commission. Coinbase contends that state gaming commissions lack the legal authority to intervene in this area.

In a public statement, Coinbase Chief Legal Officer Paul Grewal argued that congressional designations grant the CFTC sole regulatory power. He stated that state-level efforts to block or control these markets are unlawful and inhibit financial innovation.

The lawsuit filed in Illinois specifically asks for declaratory and injunctive relief. Coinbase warned that state intervention would cause the company to suffer immediate and irreparable harm, necessitating the court’s protection.

This move intensifies an existing legal conflict between cryptocurrency platforms and state regulators over the classification and oversight of novel financial products like prediction markets.