Coinbase has filed a formal response with the Commodity Futures Trading Commission (CFTC), arguing that prediction markets fall squarely within existing derivatives regulatory authority and do not require a new congressional mandate. The submission comes as legal battles over event-based contracts intensify at the state level, with a lawsuit in Wisconsin adding urgency to the debate.
No New Legislation Needed, Coinbase Says
In a letter dated April 30 addressed to CFTC Secretary Christopher Kirkpatrick, Coinbase Chief Policy Officer Faryar Shirzad responded to the agency's Advance Notice of Proposed Rulemaking (ANPR) on prediction markets. The exchange described prediction markets as “one of the most dynamic areas of derivatives markets” but insisted that current statutory authority is sufficient for oversight. Shirzad told the press that event contracts are not novel; he drew a direct parallel to traditional futures, noting that both mechanisms aggregate dispersed information into price signals.
Principles-Based Framework and Public Interest
Coinbase called on the CFTC to preserve a principles-based approach prioritizing market integrity. The filing also asked the agency to clarify how it intends to exercise its authority to block contracts deemed contrary to the public interest — a sticking point that has caused friction between the industry and regulators in recent years. The exchange added that consistent safeguards should apply to all users, whether they trade directly or through intermediaries, and that regulatory clarity would help maintain trust as participation grows.
State-Level Tensions and Federal Jurisdiction
A lawsuit in Wisconsin has intensified the regulatory debate around event contracts, highlighting contested jurisdiction between state authorities and federal agencies. Coinbase's position places it squarely among firms seeking federal clarity, as fragmented state rules create compliance nightmares for national platforms.
Shirzad Also Weighs In on Stablecoin Rewards
Separately, Shirzad addressed the ongoing CLARITY Act negotiations in a Reuters interview. He said revised language preserved “what matters” for crypto platforms while introducing limits on rewards that resemble bank interest. The compromise, brokered by Senators Thom Tillis and Angela Alsobrooks, restricts deposit-like yields but permits activity-based incentives tied to platform use. The Senate Banking Committee has scheduled a markup of the CLARITY Act for the week of May 11.
Coinbase's latest intervention on prediction markets adds to its broader push to shape U.S. crypto regulation across multiple fronts — from derivatives to stablecoins, and from federal rulemaking to state-level litigation.