The post Coinbase Sues States Over Prediction Market Regulation appeared on BitcoinEthereumNews.com. Key Points: Coinbase files suit against states, demands federalThe post Coinbase Sues States Over Prediction Market Regulation appeared on BitcoinEthereumNews.com. Key Points: Coinbase files suit against states, demands federal

Coinbase Sues States Over Prediction Market Regulation

Key Points:
  • Coinbase files suit against states, demands federal oversight for prediction markets.
  • CEO Armstrong asserts state rules stifle American competitiveness.
  • Potential impacts on U.S. market structure and CFTC jurisdiction.

Coinbase CEO Brian Armstrong, in a December 22 post on X, advocated for exclusive CFTC regulation of prediction markets, amidst lawsuits against Michigan, Illinois, and Connecticut.

The legal dispute underscores a pivotal regulatory question for prediction markets, potentially affecting their growth and competitiveness, as Coinbase’s collaboration with Kalshi aims to expand market participation.

Coinbase Challenges State Laws, Advocates CFTC Oversight

Coinbase filed a lawsuit against Michigan, Illinois, and Connecticut, asserting that prediction markets are federally regulated by the CFTC under the Commodity Exchange Act. CEO Brian Armstrong emphasized that state intervention hampers U.S. innovation. The lawsuit seeks injunctive relief to avoid business impacts. Coinbase files lawsuits against regulations on prediction markets in three states.

Market responses and political reactions have been significant. Paul Grewal, Coinbase’s Chief Legal Officer, declared on X that the actions by these states “violate the law.” This indicates ongoing tensions between state and federal oversight.

Federal vs. State Regulation: Potential Shift in U.S. Markets

Did you know? The U.S. prediction market landscape could witness a pivotal shift if the CFTC assumes primary oversight, potentially centralizing market regulation and reducing fragmented state involvement.

The current price of Bitcoin (BTC) stands at $88,980.92 with a market cap of $1.78 trillion, as reported by CoinMarketCap. The market has seen a 0.78% gain in 24 hours, but a significant 21.01% drop over 90 days. The 24-hour trading volume reached approximately $20 billion.

Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 00:13 UTC on December 22, 2025. Source: CoinMarketCap

Coincu’s research suggests that federal jurisdiction might enhance consistency in regulatory practices across states. This can foster clearer guidelines for investment and innovation in prediction markets, potentially spurring technological advancement and financial growth nationwide.

Source: https://coincu.com/news/coinbase-sues-states-prediction-market/

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