Coinbase has officially taken a position in regulating prediction markets in the United States. The exchange sent a comment letter to the Commodity Futures Trading Commission (CFTC) to discuss the matter in detail. Furthermore, it is important to note that the filing comes amidst a lawsuit in Wisconsin.
Coinbase sends letter to CFTC
In a filing with CFTC Secretary Christopher Kirkpatrick, dated April 30, Coinbase responded to the CFTC’s Advance Notice of Proposed Rulemaking (ANPR) regarding prediction markets.
“Prediction markets are rapidly becoming one of the most dynamic areas of financial derivatives markets,” he wrote. The company explained that these markets will be within the scope of the current legal authority without the need for a new authorization.
The letter, signed by Chief Policy Officer Faryar Shirzad, required Commission to support a principles-based framework and maintain market integrity. Coinbase has also reached out to regulators to clarify how it will use its power to block contracts that go against the public interest.
It urged them to ensure there is consistent protection for users regardless of whether they trade directly or through a broker. Shirzad also told the press that event-based contracts are not new.
He also emphasized that prediction markets resemble traditional futures contracts by combining dispersed price information. In addition, Crypto exchange It stated, “It is imperative that the CFTC maintain its principles-based regulatory framework while protecting market integrity by aggressively pursuing insider trading.”
About CFTC v. State of Wisconsin
This policy push comes as the legal battle between the CFTC and the US is now gaining momentum. The two countries began taking action against the major Market forecasting platforms. These sites include Coinbase, Kalshi, Robinhood, Polymarket, and Crypto.com.
The agency has filed lawsuits against Wisconsin and New York. The Wisconsin lawsuits include criminal charges for violating the state’s gambling laws. However, the platforms are subject to federally regulated derivatives schemes.
Coinbase’s submission refers directly to this jurisdiction. She noted that the CFTC “already has the authority to review, condition or prohibit contracts that are contrary to the public interest.”
