- Coinbase asked the CFTC to maintain current prediction market rules under existing derivatives law.
- Chief Policy Officer Faryar Shirzad said event-based contracts align with traditional futures and require no new regulatory mandate.
- Coinbase warned that state-level enforcement actions could fragment oversight, urging consistent federal regulation and stronger enforcement of market integrity rules.
Coinbase filed a formal letter on April 30 to the Commodity Futures Trading Commission, addressing Secretary Christopher Kirkpatrick, to influence U.S. prediction market regulation. The submission responds to the agency’s Advance Notice of Proposed Rulemaking and arrives as legal disputes unfold, including a Wisconsin lawsuit. The exchange argues current law already covers event-based contracts and calls for clear federal oversight.
Coinbase Outlines Framework in CFTC Filing
Coinbase, through Chief Policy Officer Faryar Shirzad, described prediction markets as a fast-growing derivatives segment. According to the filing, these products fall within existing statutory authority and require no new mandate.
Shirzad stated that event-based contracts are not new and align with long-regulated futures markets. He explained that both systems aggregate dispersed information into prices and support risk management.
Moreover, Coinbase urged the CFTC to maintain a principles-based framework. It asked regulators to clarify how they will block contracts deemed against the public interest.
The letter also stressed consistent safeguards for users. It said protections should apply whether users trade directly or through intermediaries.
Federal Authority Clashes With State Actions
However, the filing arrives as tensions rise between federal and state regulators. The CFTC has filed lawsuits against Wisconsin and New York over enforcement actions.
These cases involve platforms such as Coinbase, Kalshi, Robinhood, Polymarket, and Crypto.com. Wisconsin authorities have pursued felony charges under state gambling laws.
Meanwhile, these platforms operate under federally regulated derivatives structures. Coinbase pointed to this conflict in its submission.
According to the company, fragmented state actions risk disrupting national oversight. It argued that Congress assigned derivatives regulation to the CFTC for consistent supervision.
Shirzad Details Oversight and Policy Stance
Shirzad outlined four points in the submission to reinforce Coinbase’s position. He reiterated that prediction markets fit within current law and regulatory scope.
He also said the CFTC already holds authority to review or prohibit harmful contracts. That power, he noted, should address edge cases rather than restrict the entire category.
Additionally, he emphasized the need to protect market integrity through enforcement against insider trading. Coinbase called for active oversight while preserving existing frameworks.
The filing adds to Coinbase’s broader policy engagement as lawmakers review the CLARITY Act. Senators Thom Tillis and Angela Alsobrooks have negotiated related provisions.
