Judge rejects Coinbase bid to block enforcement in key U.S. state

On Aug. 7, U.S. District Judge Shalina Kumar of the Eastern District of Michigan rejectedCoinbase's (Nasdaq: COIN) bid to block enforcement of its sports event contracts.

In December 2025, the crypto exchange sued Michigan Attorney General Dana Nessel, arguing that the Commodity Futures Trading Commission (CFTC) is the sole regulator of prediction markets under the Commodity Exchange Act (CEA), rather than the contracts being subject to state gaming regulators.

Notably, Coinbase entered this sector through a partnership with Kalshi, a CFTC-regulated prediction markets platform.

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Judge says Coinbase's 'averments are, in a word, applesauce'

In its lawsuit, Coinbase argued that Michigan's gambling laws are "conflict preempted" because they hinder Congress's effort to create a uniform federal regulatory framework, and that it would be impossible to comply with both the federal CEA and the state Lawful Sports Betting Act (LSBA).

But Judge Kumar rejected those arguments, finding that Coinbase could not demonstrate that sports event contracts qualify as swaps under the CEA, or why it would be impossible to comply with both federal and state law.

"Coinbase's averments are, in a word, applesauce," Kumar wrote.

The judge therefore denied Coinbase's preliminary injunction motion, which sought to block potential state enforcement over its planned offering of sports event contracts. The ruling addresses preliminary relief, not a final judgment on the merits.

TheStreet Roundtable reached out to Coinbase for comment and had not received a response by the time of publication. This story will be updated as soon as we have one.

Coinbase (COIN) stock was trading around $148 on Aug. 7, up roughly 5% on the day.

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