Illinois, Connecticut and Michigan have been sued by cryptocurrency exchange Coinbase over their attempts to regulate the trading platform’s prediction market offerings, with the firm arguing that the states are trying to unlawfully apply their gambling laws to federally regulated transactions that are under the jurisdiction of the Commodity Futures Trading Commission. Coinbase has filed lawsuits in Illinois, Connecticut, and Michigan, challenging the states’ efforts to regulate the exchange’s prediction market offerings.
The company contends that the states are attempting to apply their gambling laws to transactions that fall under federal oversight by the Commodity Futures Trading Commission. The complaints argue that imposing state gambling rules on federally regulated crypto activities would create a fragmented and conflicting regulatory regime.
Coinbase maintains that federal law, via the CFTC, should preempt state enforcement in this area. The case underscores ongoing tensions between state regulators and federal authorities as crypto markets evolve, with potential implications for future regulation of prediction-based products.
Leave a Reply