New York, Feb 5, 2026, 11:07 EST — Regular session
- Shares of Coinbase dropped roughly 8% after Nevada regulators sought a court order to block “event contracts” within the state
- Coinbase slammed the move as a “state power grab,” arguing that federal law grants the CFTC sole jurisdiction
- Traders are watching the crypto selloff closely, along with Coinbase’s earnings report set for Feb. 12
Shares of Coinbase Global (COIN.O) dropped roughly 8% on Thursday, deepening losses following a lawsuit from Nevada’s gaming regulator. The state alleges the crypto exchange is running unlicensed wagering via “event contracts.”
This matters since Coinbase has been expanding past spot crypto trading, but a patchwork battle over prediction markets in various states might restrict new offerings just as risk appetite cools across markets.
Investors will be watching next week’s quarterly results closely, eager to hear Coinbase’s projections for revenue from its newer products—and the potential legal risks tied to them.
On Feb. 2, the Nevada Gaming Control Board filed a civil enforcement action in Carson City, seeking a court order to halt Coinbase from providing “unlicensed wagering” in the state. The board pointed out that Coinbase’s mobile app offers “event contracts,” and that sports-related contracts qualify as wagering under Nevada law. “The Board takes seriously its obligation to operate a thriving gaming industry and to protect Nevada citizens,” said chairman Mike Dreitzer.
Coinbase fought back. Ryan VanGrack, its vice president of litigation, slammed Nevada’s lawsuit as a “state power grab,” arguing Congress already gave the Commodity Futures Trading Commission exclusive authority over event contracts. PYMNTS also reported that Nevada took separate action this week to temporarily bar prediction-market platform Polymarket from offering sports and event contracts to its residents. PYMNTS.com
Event contracts are derivatives allowing users to trade on yes/no outcomes. Their structure can resemble betting to state gaming regulators, even when these contracts run through federally regulated channels.
Crypto continues to drag on the market. Bitcoin tumbled nearly 9% to around $67,015, and ether took a similar hit, sliding about 9% to roughly $1,948. Global markets remained under pressure.
When crypto prices slide for a stretch, trading volumes on exchanges often take a hit. That drop usually hits transaction revenue fast — a metric Coinbase investors keep a close eye on.
The risk here is clear: a win for Nevada in its injunction bid could spark similar moves from other states. That would leave Coinbase juggling a maze of rules, capping event contract distribution and pushing compliance costs higher. A court defeat would also weigh on sentiment heading into earnings.
Coinbase will release its fourth-quarter and full-year 2025 results on Feb. 12, after markets close. Investors are keen for updates on the ongoing Nevada lawsuit and whether the company anticipates facing similar hurdles in other states.
