Coinbase Appeals Connecticut Ruling Over Sports-Event Contracts

Coinbase Financial Markets is appealing a Connecticut federal court ruling that allowed the state to pursue its claim that sports-event contracts offered through Coinbase are illegal gambling products.

The company is asking the U.S. Court of Appeals for the Second Circuit to classify the contracts as swaps governed exclusively by the Commodity Exchange Act. Connecticut argues they are sports wagers subject to state gambling laws.

Coinbase filed its opening brief Oct. 7. Molly Abraham, a Coinbase legal executive, said the appeal seeks to confirm the Commodity Futures Trading Commission’s exclusive authority over prediction markets. “It’s about who, not if,” Abraham said.

U.S. District Judge Vernon D. Oliver denied Coinbase’s request for a preliminary injunction Aug. 10. The court found Coinbase had not shown a likelihood of success on its arguments that the contracts were swaps or that federal law preempted Connecticut’s gambling rules.

The contracts are offered through KalshiEX, a Commodity Futures Trading Commission-registered exchange, with Coinbase acting as an intermediary for customers. The appeal, Coinbase Financial Markets, Inc. v. Tong, No. 26-2297, remains pending as the broader U.S. dispute over prediction-market jurisdiction continues.