NEW YORK, August 13, 2026, 04:04 EDT
- Coinbase appeared in a New York City investigation focused on the marketing of prediction markets.
- The company’s prediction business is generating more than $100 million in annualized revenue.
- The revealed minimum represents roughly 2% of Coinbase’s revenue in the second quarter.
Coinbase Global NASDAQ:COIN is under renewed investigation regarding its rapidly expanding prediction-market operations. The New York City council has included Coinbase in a probe over suspected misleading marketing. U.S. premarket trading had just started.
The probe comes at a time when prediction markets are emerging as a significant source of revenue. Coinbase reported that contracts and revenue jumped 106% in the last quarter. Annualized revenue surpassed $100 million.
However, the current impact on earnings is modest. With an annual run rate of $100 million, quarterly revenue comes to $25 million. That is about 2.0% of Coinbase’s $1.22 billion in revenue for the second quarter.
| Platform included in inquiry | Trading status | Role in prediction markets |
|---|---|---|
| Kalshi | Private | Exchange for event contracts |
| Polymarket | Private | Cryptocurrency-based prediction market |
| Coinbase Global NASDAQ:COIN | Public | Distributor of Kalshi market products |
| Gemini Titan NASDAQ:GEMI | Public | Platform for prediction markets |
Council Speaker Julie Menin addressed Polymarket in her letter dated August 11. The correspondence also referenced Kalshi, Coinbase, and Gemini Titan. The claims involve influencer payments that were not disclosed, as well as videos depicting simulated trades.
The council requested that Polymarket respond to its inquiries within 14 business days. The council holds authority to issue subpoenas and discuss legislative measures, though it does not have the power to file criminal charges. Polymarket stated it anticipated working with the council.
A spokesperson for Coinbase stated the firm “fully complies with applicable laws.” Kalshi did not provide a comment. The investigation so far has not found evidence of wrongdoing. New York Post
| Prediction-market comparison | Q2 revenue or run rate | Share of total Q2 revenue |
|---|---|---|
| Coinbase prediction markets | Annualized revenue above $100 million; quarterly equivalent surpasses $25 million | Approximately 2% based on the stated minimum |
| Robinhood event contracts | $156 million for Q2 | 11.9% from total $1.31 billion |
The comparison highlights how the investigation has greater strategic significance than financial impact at present. Robinhood Markets NASDAQ:HOOD derives almost 12% of its quarterly revenue from event contracts. By contrast, Coinbase has disclosed baseline exposure at roughly one-sixth of that level.
Robinhood earned $156 million from event contracts during the last quarter, surpassing its crypto revenue of $100 million. Jacob Zuller, an analyst at Third Bridge, described prediction markets as potentially Robinhood’s main catalyst for growth.
| Coinbase Q2 measure | Value | Sequential change or context |
|---|---|---|
| Total revenue | $1.22 billion | Missed $1.35 billion consensus estimate |
| Transaction revenue | $599 million | Down 21% |
| Subscription and services | $555 million | Accounts for 48% of net revenue |
| Prediction-market contracts and revenue | Over $100 million annualized revenue | Up 106% |
| Crypto trading market share | 10.3% | New all-time high |
Coinbase is seeking fresh offerings as main crypto operations slowed. Transaction revenue dropped 21% quarter-over-quarter to $599 million. Revenue from subscriptions and services declined to $555 million.
Growth in prediction markets is accelerating. The number of contracts and revenue both rose by over 100% in Q2. A recently launched crypto-binaries product increased daily trader numbers threefold and pushed daily revenue to four times the May average.
Coinbase finished Wednesday with shares at $149.04, gaining 0.31%. After-hours trading brought a further 0.11% rise. Trading volume reached 5.93 million shares.
| Recent analyst recommendation | Rating | Price target | Date |
|---|---|---|---|
| Cantor Fitzgerald | Buy | $184 | Aug. 7 |
| Bank of America | Buy | $174 | Aug. 5 |
| J.P. Morgan | Buy | $148 | Aug. 5 |
| BTIG | Buy | $240 | Aug. 5 |
| Mizuho | Hold | $155 | Aug. 4 |
The consensus among 34 analysts is still Buy. The mean target of $195.52 suggests a potential upside of 31.2% from the close on Wednesday. Analyst targets range from $95 to $330, reflecting a broad range of opinions.
Risks: The city may restrict its response to holding hearings or asking for greater disclosure. A more extensive intervention at the state level could limit availability, increase regulatory compliance expenses, and impede Coinbase’s efforts to diversify. Fluctuations in crypto prices and trading activity continue to be major factors affecting earnings.
The next key catalyst will be the council’s response. Investors are advised to monitor if Coinbase is issued any formal requests or subpoenas. This would escalate the sector-wide investigation into an expense particular to the company.
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