{"id":42222,"date":"2026-05-04T21:21:50","date_gmt":"2026-05-04T21:21:50","guid":{"rendered":"https:\/\/cryptd.in\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/"},"modified":"2026-05-04T21:21:50","modified_gmt":"2026-05-04T21:21:50","slug":"coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight","status":"publish","type":"post","link":"https:\/\/cryptd.in\/et\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/","title":{"rendered":"Coinbase Warns Against State-by-State Prediction Markets Chaos, Backs CFTC Oversight"},"content":{"rendered":"<p>Coinbase recently filed a formal comment letter with the Commodity Futures Trading Commission (CFTC), arguing that prediction markets are derivatives that fall under federal jurisdiction and should stay there.<\/p>\n<p>The company warned that letting states write their own rules for these markets would recreate the regulatory \u201ctotal chaos\u201d that Congress built the federal derivatives framework to prevent in the first place.<\/p>\n<h2>Federal Jurisdiction and Economic Utility<\/h2>\n<p>Faryar Shirzad, Coinbase\u2019s Chief Policy Officer, <a href=\"https:\/\/x.com\/faryarshirzad\/status\/2050918198124466437?s=20\">posted<\/a> the company\u2019s four-point position on X alongside the submission.\u00a0According to him, event contracts are not new, with the CFTC having overseen derivatives tied to real-world contingencies for decades.<\/p>\n<p>These instruments aggregate scattered information into prices, giving businesses and individuals a way to hedge uncertainty, just like traditional futures markets.\u00a0Congress, he wrote, put that oversight in federal hands precisely to avoid \u201cfragmented state-by-state intervention\u201d that would create \u201cregulatory conflict in markets that are inherently interstate.\u201d<\/p>\n<p>The letter <a href=\"https:\/\/comments.cftc.gov\/PublicComments\/ViewComment.aspx?id=115608&amp;SearchText=\">invokes<\/a> the total chaos that lawmakers in 1974 warned would follow if different state laws governed the futures market.<\/p>\n<p>Coinbase acknowledged that the CFTC can police the edges since the agency already has the power to prohibit contracts contrary to the public interest. Those are the ones that invite manipulation or settle on things like physical harm.<\/p>\n<p>But the company insisted that this power should be used to address specific problem contracts, not to foreclose a whole category that the letter described as a public good.<\/p>\n<p>A Federal Reserve staff working paper published earlier this year found prediction markets matched or beat the forecasting accuracy of established benchmarks, including the New York Fed\u2019s own surveys.<\/p>\n<h2>A Call for Clarity on Manipulation and Public Interest<\/h2>\n<p>Much of Coinbase\u2019s letter wrestled with how the CFTC should interpret its power to deem certain contracts contrary to the public interest.\u00a0The crypto firm pointed to the agency\u2019s Rule 40.11, which governs when it can declare that a contract is against the good of the public.<\/p>\n<p>Coinbase argued that the rule has been widely misread as a blanket ban on certain categories of contracts. However, the actual statute requires a two-step process that first determines whether a contract falls into any of the enumerated categories, which are terrorism, assassination, and gaming, and then determines separately whether the specific contract is against the public interest.<\/p>\n<p>The company now wants a replacement rule that makes the required two-step process explicit. It also recommended modernizing the CFTC\u2019s guidance on how exchanges can demonstrate that a contract isn\u2019t readily susceptible to manipulation.<\/p>\n<p>The filing has come at a time when there is a widening legal brawl regarding prediction markets after New York\u2019s attorney general <a href=\"https:\/\/cryptopotato.com\/new-york-sues-coinbase-and-gemini-over-prediction-markets\/\">sued<\/a> Coinbase over its offerings on April 22, with the\u00a0crypto exchange itself <a href=\"https:\/\/cryptopotato.com\/coinbase-sues-illinois-michigan-and-connecticut-over-prediction-market-crackdown\/\">suing<\/a> Illinois, Michigan, and Connecticut in December 2025 when regulators in those states tried to shut those markets down under gambling laws.<\/p>\n<p>Postitus <a href=\"https:\/\/cryptopotato.com\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/\">Coinbase Warns Against State-by-State Prediction Markets Chaos, Backs CFTC Oversight<\/a> ilmus esimesena veebilehel <a href=\"https:\/\/cryptopotato.com\/\" rel=\"nofollow\">CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>Coinbase recently filed a formal comment letter with the Commodity Futures Trading Commission (CFTC), arguing that prediction markets are derivatives that fall under federal jurisdiction and should stay there. The company warned that letting states write their own rules for these markets would recreate the regulatory \u201ctotal chaos\u201d that Congress built the federal derivatives framework [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":42224,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-42222","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-feeds"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Coinbase Warns Against State-by-State Prediction Markets Chaos, Backs CFTC Oversight - cryptd.in<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptd.in\/et\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/\" \/>\n<meta property=\"og:locale\" content=\"et_EE\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Coinbase Warns Against State-by-State Prediction Markets Chaos, Backs CFTC Oversight - cryptd.in\" \/>\n<meta property=\"og:description\" content=\"Coinbase recently filed a formal comment letter with the Commodity Futures Trading Commission (CFTC), arguing that prediction markets are derivatives that fall under federal jurisdiction and should stay there. The company warned that letting states write their own rules for these markets would recreate the regulatory \u201ctotal chaos\u201d that Congress built the federal derivatives framework [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptd.in\/et\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/\" \/>\n<meta property=\"og:site_name\" content=\"cryptd.in\" \/>\n<meta property=\"article:published_time\" content=\"2026-05-04T21:21:50+00:00\" \/>\n<meta name=\"author\" content=\"cryptd.in\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cryptd.in\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutit\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/cryptd.in\\\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/cryptd.in\\\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\\\/\"},\"author\":{\"name\":\"cryptd.in\",\"@id\":\"https:\\\/\\\/cryptd.in\\\/#\\\/schema\\\/person\\\/7973e8183bc6723b86adfe84d5af0ce4\"},\"headline\":\"Coinbase Warns Against State-by-State Prediction Markets Chaos, Backs CFTC Oversight\",\"datePublished\":\"2026-05-04T21:21:50+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/cryptd.in\\\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\\\/\"},\"wordCount\":501,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/cryptd.in\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/cryptd.in\\\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/cryptd.in\\\/wp-content\\\/uploads\\\/2026\\\/05\\\/Coinbase_Lawsuit-AW67at.jpg\",\"articleSection\":[\"Feeds\"],\"inLanguage\":\"et\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/cryptd.in\\\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/cryptd.in\\\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\\\/\",\"url\":\"https:\\\/\\\/cryptd.in\\\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\\\/\",\"name\":\"Coinbase Warns Against State-by-State Prediction Markets Chaos, Backs CFTC Oversight - 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The company warned that letting states write their own rules for these markets would recreate the regulatory \u201ctotal chaos\u201d that Congress built the federal derivatives framework [&hellip;]","og_url":"https:\/\/cryptd.in\/et\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/","og_site_name":"cryptd.in","article_published_time":"2026-05-04T21:21:50+00:00","author":"cryptd.in","twitter_card":"summary_large_image","twitter_misc":{"Written by":"cryptd.in","Est. reading time":"2 minutit"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/cryptd.in\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/#article","isPartOf":{"@id":"https:\/\/cryptd.in\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/"},"author":{"name":"cryptd.in","@id":"https:\/\/cryptd.in\/#\/schema\/person\/7973e8183bc6723b86adfe84d5af0ce4"},"headline":"Coinbase Warns Against State-by-State Prediction Markets Chaos, Backs CFTC Oversight","datePublished":"2026-05-04T21:21:50+00:00","mainEntityOfPage":{"@id":"https:\/\/cryptd.in\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/"},"wordCount":501,"commentCount":0,"publisher":{"@id":"https:\/\/cryptd.in\/#organization"},"image":{"@id":"https:\/\/cryptd.in\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/#primaryimage"},"thumbnailUrl":"https:\/\/cryptd.in\/wp-content\/uploads\/2026\/05\/Coinbase_Lawsuit-AW67at.jpg","articleSection":["Feeds"],"inLanguage":"et","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/cryptd.in\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/cryptd.in\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/","url":"https:\/\/cryptd.in\/coinbase-warns-against-state-by-state-prediction-markets-chaos-backs-cftc-oversight\/","name":"Coinbase Warns Against State-by-State Prediction Markets Chaos, Backs CFTC Oversight - 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