Coinbase has hit back at Nevada state’s gaming regulator regarding a lawsuit alleging that the exchange was offering unlicensed betting services through its prediction markets feature. In a fresh development, the court has set a hearing date for next week, Coinbase chief legal officer Paul Grewal has revealed.
Sharing an update on Thursday, Grewal said, “we argued that the due process requires at a minimum that we get a chance to be heard.”
Here’s what happened
The Nevada Gaming Control Board filed a civil lawsuit against Coinbase this week, alleging that Coinbase’s prediction market service was categorized as unlicensed wagering (betting) that violates state law. The exchange launched its in-app predictions feature in partnership with Kalshi just a few weeks back in January.
As part of its lawsuit, the state gaming regulator had called for an immediate ban order for this Coinbase services from the District Court for Carson City.
As updated by Grewal, however, the court has decided to hear the exchange on the matter.
“Yesterday the Nevada Gaming Control Board tried to get a NV state court to stop us ex parte from listing there any event contracts, sports-related or otherwise, without any opportunity for us to be heard. Today that court said no,” he said. “Today we also went to NV federal court to stop this violation of federal law. Congress gave @CFTC exclusive jurisdiction over these listed contracts, and it’s Congress that calls the shots.”
Coinbase submitted a counter filing with the Nevada court on Tuesday arguing that if it is arm-twisted into banning “smart contracts” in the name of betting — it would not be able to offer CFTC-approved contracts around financial activities as well in the state.
Source: X/ @iampaulgrewal
More clarity on the situation is expected after the court hearing next week. Grewal did not disclose the exact date.
Meanwhile, the Nevada gaming authority has filed a similar lawsuit against the Polymarket prediction market. For now, Polymarket has not addressed the situation.