Coinbase Faces Nevada Legal Challenge Over Prediction Markets
On February 4, 2026, Nevada's Gaming Control Board initiated legal proceedings against Coinbase, alleging the cryptocurrency exchange is operating illegal sports betting services through its newly launched prediction markets. The regulatory body has filed for a temporary restraining order and preliminary injunction to immediately halt these operations. This legal action follows closely after Coinbase's announcement of a nationwide rollout of prediction market services in partnership with Kalshi, a financial prediction market platform. The lawsuit represents a significant regulatory challenge for Coinbase as it expands into new financial product verticals, potentially setting precedents for how cryptocurrency platforms can offer prediction-based services across different U.S. jurisdictions. The case highlights the ongoing tension between innovative crypto financial products and existing gambling regulations, with Nevada regulators taking an aggressive stance against what they perceive as unlicensed sports betting operations disguised as financial prediction markets. This development could impact Coinbase's broader strategy to diversify its revenue streams beyond traditional trading services and may influence how other crypto exchanges approach similar product offerings in regulated markets.
Nevada Regulators Sue Coinbase Over Crypto Prediction Markets
Nevada's Gaming Control Board has filed a lawsuit against Coinbase, alleging the crypto exchange is offering illegal sports betting services through its prediction markets. The regulator seeks a temporary restraining order and preliminary injunction to halt these operations immediately.
The legal action comes just days after Coinbase announced a nationwide rollout of prediction market services in partnership with Kalshi, a federally regulated platform. Nevada authorities contend these markets constitute gambling under state law, despite federal permissibility.
"Our duty is to protect both Nevada's gaming industry and its residents," said Mike Dreitzer, Chair of the Gaming Control Board. The lawsuit underscores growing tension between state regulators and crypto firms expanding into prediction markets.
Ark Invest Doubles Down on Crypto Assets Amid Market Weakness
Cathie Wood's Ark Invest capitalized on the recent crypto market downturn, deploying nearly $10 million across Bitcoin-linked equities and digital asset providers. The firm acquired $3.25 million in Bitmine Immersion Technologies shares, $2.4 million of Circle Internet Group, $3.5 million in Bullish, and $630,606 worth of Coinbase stock during Tuesday's trading session.
These purchases followed a more substantial $24.8 million investment spree on Monday, when Ark increased positions in Robinhood, Circle, and Coinbase. The buying activity comes as bitcoin consolidates near $75,000 after slipping below $80,000 earlier in the week, dragging crypto-related equities lower amid fragile market sentiment.
"When there's blood in the streets, buy bullets" appears to be Ark's strategy as institutional investors reassess risk exposure. The firm's persistent accumulation of crypto assets during price weakness signals conviction in the sector's long-term growth prospects, particularly in infrastructure providers facilitating institutional adoption.
