Coinbase Chief Policy Officer Says Prediction Markets Are ‘Maturing’, As Firms Line Up On CFTC Rules

• Coinbase Policy Chief Faryar Shirzad said the exchange submitted a letter to the Commodity Futures Trading Commission last week.
• Shirzad said event-based contracts are “not new” and described prediction markets as a “maturing” sector with established economic functions
• The responses follow the Commodity Futures Trading Commission’s rulemaking initiative seeking input on how to regulate event-based contracts as the market rapidly expands. 

Coinbase’s (COIN) Policy Chief Faryar Shirzad said on Sunday that the sector doesn’t need new rules, because it already fits within the Commodity Futures Trading Commission’s (CFTC) existing derivatives rules.

Shirzad reported that the exchange had submitted a comment letter to CFTC on prediction markets, outlining its stance on how the emerging sector should be regulated. He shared key points from the submission, stating that event-based contracts are “not new.” The letter was sent last week in response to the regulator’s request for input.

Shirzad added that prediction markets are “maturing,” serving a core economic role by aggregating dispersed information into prices and helping participants hedge uncertainty, similar to traditional futures markets. He said the CFTC already has the authority to oversee such products, including restricting contracts that pose risks, and should focus on refining oversight rather than introducing new rules.

Coinbase’s stock was up over 1% during after-hours trading. On Stocktwits, the retail sentiment around COIN remained in the ‘neutral’ zone, while chatter around it stayed at ‘high’ levels over the past day.

Industry Joins Debate On Prediction Markets

Coinbase is not the only one weighing in. Other crypto-focused firms, including venture capital giants Andreessen Horowitz (a16z) and Paradigm, have also submitted responses to the CFTC.

Miles Jennings, the Head of Policy at a16z, said prediction markets are “one of the most powerful tools we have for turning dispersed knowledge into actionable information,” adding that prices reflect “genuine conviction, not casual opinion.” 

Jennings also pointed to rapid growth in the sector, noting that Kalshi’s weekly volumes have surged significantly this year, while warning that regulatory uncertainty could limit future innovation.

Regulatory Pressure 

The responses come after CFTC issued an Advanced Notice of Proposed Rulemaking (ANPRM) in March, seeking comment on how to regulate prediction markets, also known as event-based contracts. The regulator has been evaluating whether prediction market products fall fully within its existing derivatives framework or require additional guardrails, as trading tied to real-world outcomes gains traction.

Prediction markets have gained popularity in recent years, but have also drawn scrutiny from lawmakers who argued such products resembled “illegal gambling,” adding to the regulatory uncertainty. 

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