Crypto: Coinbase Fends Off Nevada’s Emergency Bid To Halt Prediction Markets

A Nevada judge declined to grant regulators’ bid to halt Coinbase’s event contract markets, as the exchange presses a CFTC preemption argument in federal court.

A Nevada state court denied regulators’ request for an emergency temporary restraining order (TRO) to immediately halt Coinbase’s new prediction market offering.

Instead, the court set a hearing for next week so the exchange can respond, according to Coinbase chief legal officer Paul Grewal.

The Nevada Gaming Control Board (NGCB) filed a civil enforcement action in Carson City on Monday, accusing Coinbase of offering unlicensed wagers on sports event contracts and asking for a TRO and preliminary injunction to block the products for Nevada residents.

​In a Tuesday filing, Coinbase argued that Nevada’s requested order was broader than sports betting and would effectively bar it from offering any Commodity Futures Trading Commission (CFTC) regulated “event contracts” in the state, including those tied to financial or commodity outcomes.

The company also told the court there was no genuine claim of irreparable harm because Kalshi, the CFTC‑registered market whose contracts Coinbase lists, can continue to offer the same products directly to Nevada users while litigation proceeds.

Related: Crypto.com launches standalone prediction market app ‘OG’

​Grewal said that Coinbase has now gone to federal court in Nevada as well, seeking to block the state’s enforcement effort as a violation of federal law.

“Congress gave CFTC exclusive jurisdiction over these listed contracts,” he said, “and it's Congress that calls the shots.”

In its brief, Coinbase contends that the Commodity Exchange Act grants the CFTC “exclusive jurisdiction” over swaps and event contracts traded on regulated exchanges, and that Nevada’s attempt to recharacterize those instruments as state regulated gambling is preempted by Congress’s derivatives framework.

Source: CoinTelegraph