Coinbase(US:COIN) Benzinga·2025-12-19 08:27Core Viewpoint - Coinbase Global Inc. has filed lawsuits against Michigan, Illinois, and Connecticut to assert that the Commodity Futures Trading Commission (CFTC) is the sole regulator of prediction markets, challenging state authority over these markets [1][2]. Group 1: Legal Actions - The lawsuits aim to prevent state intervention, which Coinbase argues could cause "immediate and irreparable" harm to its operations [1]. - Coinbase's Chief Legal Officer stated that state efforts to control prediction markets stifle innovation and violate the law [2]. Group 2: Market Context - The legal actions follow Coinbase's announcement of entering the prediction markets sector through a partnership with Kalshi, a CFTC-regulated platform, with plans to offer event-contract trading starting in January 2026 [2]. - The distinction between prediction markets and traditional sportsbooks is emphasized, with prediction markets being described as neutral exchanges that match buyers and sellers [3]. Group 3: Regulatory Implications - The legal challenge could set a precedent for the regulation of prediction markets across the U.S., potentially influencing the future landscape of this sector [4]. - There is growing tension between federal and state authorities regarding the regulation of emerging financial technologies, with states like Connecticut taking action against operators for allegedly unlicensed products [3]. Group 4: Market Performance - Following the news, Coinbase's stock closed down about 2% at $239.20, having already lost 7% of its value this year [4].