Coinbase urges CFTC to regulate prediction markets

Coinbase filed a formal comment letter with the U.S. Commodity Futures Trading Commission on April 30, 2026 and posted its position publicly on May 3, urging the agency to regulate prediction markets under the current federal derivatives framework. The company said event-based contracts already fall within the CFTC’s authority and do not require new statutory powers.

In the letter and a public post, Coinbase’s chief policy officer Faryar Shirzad set out four main points. First, the firm argued that event-based contracts are similar to other derivatives the CFTC oversees and therefore fit within existing law. Second, Coinbase said these products function like futures by aggregating dispersed information into prices and by allowing participants to hedge uncertainty. Third, the company noted that Congress gave the CFTC national responsibility for derivatives to ensure consistent oversight across states. Fourth, Coinbase pointed to the CFTC’s existing enforcement tools to review, condition or prohibit contracts that could be manipulated or harm the public interest.

Shirzad wrote on X that “Prediction markets may look novel, but they sit comfortably within existing statutory authority-no new mandate required.” He described the filing as a request for the agency to apply its current authorities to event-based products.

The filing comes amid a broader jurisdictional dispute. Under Chairman Michael Selig, the CFTC has asserted that many prediction contracts qualify as “swaps” under the Commodity Exchange Act and that federal law should preempt state enforcement. Several states have taken the opposite view, saying some prediction products resemble gambling and fall under state control.

States including Texas, Arizona, Nevada and New Jersey have pursued enforcement or issued orders against platforms. The CFTC has sued states such as Arizona, Connecticut, Illinois, New York and Wisconsin to block state actions. State and federal authorities have also targeted individual companies: New York sued Coinbase Financial Markets and Gemini, Arizona brought a criminal case against Kalshi, and Wisconsin, Connecticut and Illinois issued cease-and-desist orders against platforms including Kalshi and Polymarket. Courts have issued mixed rulings and legal authority remains unresolved in several matters.

In its filing, Coinbase urged the CFTC to use its existing powers to create uniform rules for interstate prediction markets rather than cede oversight to a patchwork of state regulators. The company argued federal supervision would let the agency refine guardrails as the market develops.

Shirzad wrote on X that “Prediction markets are maturing. The question is not whether they fit within the law-they do-but how to ensure they develop with integrity, clarity, and appropriate guardrails.” The filing asked the CFTC to clarify how it will apply review and enforcement authorities to event-based contracts.

Coinbase indicated it will continue engaging with the CFTC while regulators, courts and states address jurisdictional and enforcement questions. Until courts issue definitive rulings or Congress changes the law, the legal status of many prediction market products remains in dispute.