Coinbase pushes again towards CFTC prediction market ban

• Coinbase publishes its response to the CFTC Discover of Proposed Rulemaking.
• The platform is urging the fee to withdraw the proposal, citing considerations about its content material and analytical strategy.
• Paul Grewal factors out inconsistencies within the CFTC's definition of playing.

Coinbase, a significant cryptocurrency trade in america, responded to the Commodity Futures Buying and selling Fee's (CFTC) Discover of Proposed Rulemaking issued in Could 2024. The corporate urged regulators to withdraw the proposal, citing main considerations about its content material and analytical strategy.

Chief Authorized Officer Paul Grewal offered key insights from Coinbase's August 8, 2024 letter and shared quite a lot of threads on Platform X. As a vital and first concern, Grewal pointed to inconsistencies within the definition of “gaming” within the CFTC's proposal. Whereas the CFTC included contracts like Nobel Prizes and Oscars in its narrative, Grewal stated they’re by no means playing.

Normal Counsel Paul Grewal shared insights from Coinbase's August 8, 2024 letter on X (previously Twitter). A key concern that was highlighted was the inconsistency within the CFTC's definition of “gaming”. Whereas the CFTC included contracts like Nobel Prizes and Oscars in its story, Grewal argued that these weren’t playing actions.

In its letter, Coinbase argued that the CFTC didn’t distinguish between market hypothesis and precise playing within the proposal. The letter went on to argue that few would take into account occasions resembling elections or skilled awards such because the Nobel Prize or the Academy Awards to be video games, however these have been the very examples outlined as “gaming” within the proposal. Grewal identified that this definition might be deceptive and depart from established legislative historical past.

For context, the US CFTC has beforehand proposed a transparent rejection of occasion contracts or prediction markets. Whereas the proposal outlined playing as betting on the outcomes of political contests, prizes or athletic occasions, it obtained assist from three Democratic commissioners.

Coinbase's lawyer additional disputed the CFTC's declare of appearing within the “public curiosity,” arguing that the CFTC's categorization of contracts doesn’t profit the general public. In its letter, Coinbase challenged the regulator's statutory authority to categorize contracts. The corporate added that the proposal failed to acknowledge the general public advantages of prediction markets.