Report: Coinbase to Share Data in Response to CFTC Subpoena
Coinbase reportedly told customers that it may have to share data demanded by the Commodity Futures Trading Commission (CFTC).
The regulator has sent a subpoena to the firm that seeks information about Coinbase customers’ interactions with prediction market firm Polymarket, CoinDesk reported Thursday (Jan. 9), citing unnamed sources.
Coinbase has emailed some customers saying it may have to share that data with the CFTC, according to the report.
A Coinbase spokesperson said in the report: “When we receive requests for information from a government, each request is carefully reviewed by a team of trained experts using established procedures to determine its legal sufficiency. Where necessary, we will seek to narrow requests that are overly broad or vague in order to provide a more appropriately tailored response, and in some cases we object to producing any information at all.”
The CFTC subpoena is part of a lengthy legal battle the regulator has been waging with prediction markets firms like Polymarket, according to the CoinDesk report.
The regulator lost a case against another such firm, Kalshi, last year, when a judge ruled it could not prevent the company from listing election contracts, the report said. The CFTC filed an appeal.
Polymarket said in May that it is “the world’s largest prediction market” and that it raised $70 million of new capital across two previously unannounced rounds.
“I started Polymarket because I believe that market-based forecasts will inevitably become an integral part of how we follow news and find truth on the internet,” Polymarket Founder Shayne Coplan said at the time in a press release. “It has been humbling to see that vision begin to materialize at scale — with so many people relying on Polymarket when following important current events.”
In 2022, the CFTC fined Polymarket $1.4 million for failing to register with the regulator.
“All derivatives markets must operate within the bounds of the law regardless of the technology used, and particularly including those in the so-called decentralized finance or ‘DeFi’ space,” Acting Director of Enforcement Vincent McGonagle said at the time in a press release. “Market participants should proactively engage with the CFTC to ensure that our markets remain robust, transparent and afford customers the protection provided under the CEA and our regulations.”
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