Show
Coinbase, a major cryptocurrency exchange, is asking U.S. regulators to create clear rules for prediction markets. They believe defined regulations will offer more legal security and help this growing area thrive.
On Tuesday, Coinbase’s head of policy, Faryar Shirzad, announced via X (formerly Twitter) that the company submitted feedback to the Commodity Futures Trading Commission (CFTC) regarding proposed rules for event-based contracts. Their response supports modernizing how the CFTC currently handles these types of agreements under Rule 40.11 and advocates for a clearer, more organized review system.
Giving more people access to payment accounts at the Federal Reserve is a key part of updating how payments work in the U.S., and we need to ensure the system functions effectively. That’s why Coinbase submitted feedback to the Federal Reserve this week. Our main point is this: broaden access, but also create a solid, well-designed system…
— Faryar Shirzad 🛡️ (@faryarshirzad) July 28, 2026
How Coinbase thinks rules should work
Coinbase suggests the CFTC consider each legal question related to event contracts independently, rather than as a single issue.
The agreement states that the Commission needs to initially check if a contract involves one of the specific activities listed in the Commodity Exchange Act. Only then should they consider whether the contract could harm the public.
Coinbase believes joining these two investigations causes confusion and doesn’t align with how the law is set up. They argue that keeping the inquiries separate would give businesses a better understanding of the rules, while still respecting the original intent of the law.
Why the proposal matters
Coinbase reports that prediction markets are rapidly gaining popularity within the derivatives industry. These markets are increasingly used to manage risk and gather insights about various events.
With more people taking part in the market, the exchange emphasized the need for clear rules. It explained that a transparent set of guidelines would help everyone involved understand what’s allowed, while still letting regulators protect investors.
The company explained that having clearer rules would make things more predictable for everyone, while still allowing the Commission to block agreements that violate the law.
Coinbase isn’t alone in calling for change
Coinbase’s suggestions align with those of the Hyperliquid Policy Center and Multicoin Capital, both of which have called on the Commodity Futures Trading Commission (CFTC) to create a well-defined national set of rules for prediction markets.
Two organizations submitted a joint letter supporting a proposed rule regarding prediction markets, while also suggesting ways to make the regulations clearer. They highlighted the significant growth of these markets, noting that trading volume had surpassed $50 billion in June across leading platforms, fueled by bets on events like elections, economic trends, and interest rates.
These groups contend that Congress designed prediction markets operating on national exchanges to be overseen solely by the CFTC, not by a mix of individual state gambling regulations. They explained that these exchange-traded contracts are different from typical sports betting because the exchange simply connects those who want to buy and sell, rather than acting as the bookmaker on every bet.
These statements were made as several U.S. states are still disputing the legality of platforms that allow people to bet on the outcomes of sporting events. The groups argued that requiring these platforms to follow the gambling laws of each individual state would defeat the purpose of federal regulations aiming to create a consistent national system.
Coinbase backs modernization of CFTC rules
Coinbase believes the new rules are a significant step forward for how event contracts are regulated. They explained that the Commission’s work to define what serves the public interest could make the rules for prediction markets clearer and more reliable, while still protecting against fraud and maintaining fair markets.
As an investor, it’s good to hear Coinbase said they’re still open to collaborating with the CFTC while they finish up their new regulations. It suggests they want to be part of the process and hopefully find a workable solution for everyone.
Prediction markets keep gaining momentum
Coinbase has submitted its paperwork as interest in prediction markets grows, attracting more scrutiny from regulators and traders alike.
The CFTC is considering how to legally classify event contracts as commodity derivatives, even as companies offering these types of bets continue to grow their services. The agency’s final decision will likely shape the future of prediction markets – specifically how they are created and overseen – in the U.S.
2026-07-28 17:26