Coinbase Pushes Again on CFTC’s Prediction Market Ban

• Coinbase releases its response to the CFTC’s Discover of Proposed Rulemaking.
• The platform urges the fee to withdraw the proposal, citing considerations about its content material and analytical strategy.
• Paul Grewal factors out the inconsistencies within the CFTC’s definition of gaming.

Coinbase, a significant cryptocurrency alternate in america, has responded to the Commodity Futures Buying and selling Fee’s (CFTC) Discover of Proposed Rulemaking issued in Might 2024. The corporate has referred to as on regulators to withdraw the proposal, citing main considerations about its content material and analytical strategy.

Offering key insights on Coinbase’s letter dated August 8, 2024, Chief Authorized Officer Paul Grewal shared a collection of threads on the X platform. As a crucial and first concern, Grewal identified the inconsistencies within the definition of “gaming” in CFTC’s proposal. Whereas CFTC included contracts like Nobel Prizes and Oscars of their narrative, Grewal proclaimed that they’re in no way gaming.

Chief Authorized Officer Paul Grewal shared insights into Coinbase’s August 8, 2024 letter on X (previously Twitter). A key concern highlighted was the inconsistency within the CFTC’s definition of “gaming.” Whereas the CFTC included contracts like Nobel Prizes and Oscars in its narrative, Grewal argued that these usually are not playing actions.

In its letter, Coinbase asserted that the CFTC didn’t differentiate between market hypothesis and precise playing within the proposal. The letter additional argued that few would think about occasions like elections or skilled awards, such because the Nobel Prize or Academy Awards, as video games, but these have been the very examples used to outline “gaming” within the proposal. Grewal careworn that this definition might be deceptive and deviated from established legislative historical past.

For context, the US CFTC had beforehand proposed a transparent rejection of occasion contracts or prediction market buying and selling. Whereas the proposal outlined gaming as betting on the outcomes of political contests, awards, or athletic occasions, it obtained assist from three Democratic commissioners.

Additional difficult the CFTC’s claims of appearing upon “public curiosity,” the Coinbase lawyer argued that the CFTC’s categorization of contracts will not be useful to the general public. In its letter, Coinbase questioned the regulator’s statutory authority to categorize the contracts. The corporate added that the proposal didn’t acknowledge the general public advantages of prediction markets.