Coinbase Sends Letter To CFTC Over Prediction Market Rules Amid Wisconsin Lawsuit
Highlights
- Coinbase claims that prediction markets do not require additional regulations.
- Coinbase's Faryar Shirzad cautions about taking actions at the state level as it may interfere with federal regulations.
- Recently, Wisconsin was sued by Commodity Futures Trading Commission.
Coinbase has officially taken a position in the regulation of prediction markets in the United States. The exchange has submitted a comment letter to the Commodity Futures Trading Commission (CFTC) to discuss the matter in detail. Moreover, it’s important to note that the submission comes amid the Wisconsin lawsuit.
Coinbase Submits Letter To CFTC
In a filing to the CFTC Secretary Christopher Kirkpatrick, dated April 30, Coinbase responded to CFTC’s Advance Notice of Proposed Rulemaking (ANPR) on prediction markets.
It wrote that “prediction markets have fast become one of the most dynamic areas of derivatives markets.” The company explained that these markets would be quite well within the existing statutory power with no new requirement mandate.
The letter, signed by Chief Policy Officer Faryar Shirzad, requested the Commission to uphold a principles-based framework and maintain market integrity. Coinbase has also approached regulators to clarify how it will use its authority to prohibit contracts that are against the public interest.
It urged them to ensure that there are consistent protections to users regardless of whether they are trading directly or through an intermediary. Shirzad also told the press that event-based contracts are not new.
He also asserted prediction markets to be similar to the traditional futures by bringing together the dispersed information on prices. In addition, the crypto exchange stated it is “essential the CFTC maintains its principles-based regulatory framework while protecting market integrity by aggressively pursuing insider trading.”
About CFTC vs. Wisconsin Lawsuit
The policy push comes as the now legal battle between the CFTC and the U.S. states gains traction. The two states started to take action against major prediction market platforms. These include Coinbase, Kalshi, Robinhood, Polymarket, and Crypto.com.
The agency filed lawsuits against Wisconsin and New York. The Wisconsin suits include felony charges of violations of the state gambling laws. However, the platforms are under federally regulated derivatives schemes.
Coinbase submission refers directly to this area of jurisdiction. It noted the CFTC “already has the authority to review, condition, or prohibit contracts that are contrary to the public interest.”
Instant Currency Exchange at BestChange with Ease
- Compare Rates Across 1000+ Exchanges
- Access 250+ Cryptocurrencies & Pairs
- Save Time with Real-Time Price Tracking
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more… to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Delivered every day.
- Insights that move markets
- 100,000 active subscribers
