Svmuu News Coinbase Ryan VanGrack, Vice President of Legal Affairs and Head of Global Litigation, stated that some U.S. state governments are “misleading the public” when restricting prediction market operations, misinterpreting federal law in an attempt to expand state regulatory authority. Coinbase Following the recent launch of related products in partnership with prediction market platform Kalshi, lawsuits have been filed in Connecticut, Illinois, Michigan, and Nevada.Regulators in these states had previously issued cease-and-desist orders or warnings, asserting that contracts related to sporting events constitute illegal gambling. VanGrack stated that these actions pose a “real and imminent threat” to users, prompting Coinbase to seek a ruling from federal court.VanGrack pointed out that the U.S. Commodity Exchange Act explicitly grants the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over the derivatives market, and that prediction market products—including event contracts—should fall under federal regulatory authority. He argued that states’ attempts to exclude sports event contracts from the definition of derivatives lack legal basis.VanGrack refuted claims by some state governments that the market would lack regulation without state-level intervention, emphasizing that the CFTC has long regulated a derivatives market worth trillions of dollars and has already issued enforcement alerts regarding insider trading in event contracts. Coinbase He also pointed out that exchange-based prediction markets differ fundamentally from traditional sports betting. On CFTC-regulated exchanges such as Kalshi, prices are determined by market participants, whereas traditional betting operators set the odds and bet directly against the public.VanGrack stated that states can still play a role in consumer protection and anti-fraud efforts, but subjecting a national derivatives market to a “patchwork system of 50 different regulators” would undermine market stability and investor confidence.