New York, Feb 4, 2026, 19:06 EST — After-hours
- After-hours trading saw Coinbase shares drop roughly 6% following a lawsuit from Nevada’s gaming regulator targeting sports-linked “event contracts.”
- Coinbase slammed Nevada’s action as a “state power grab,” insisting that federal derivatives regulations should take precedence.
- Traders are eyeing crypto prices alongside Coinbase’s February 12 earnings for signals on volumes and potential legal risks.
Shares of Coinbase Global dropped 6.2% to $168.62 in after-hours trading Wednesday, as losses deepened following Nevada’s gaming regulator’s move to block the company’s sports-linked event contracts.
Nevada’s move opens a fresh battle over “prediction markets,” a tool brokers and crypto platforms have touted to keep retail traders engaged. But states are cracking down, viewing sports-linked contracts more as gambling than financial products. 1
The legal blow came amid a drop in crypto prices and a slide in stocks tied to exchanges, raising questions about whether trading volume is fading ahead of Coinbase’s quarterly earnings. 2
The Nevada Gaming Control Board announced it filed a civil enforcement action in Carson City against Coinbase Financial Markets on Feb. 2, aiming to secure a court order to halt what it described as unlicensed wagering. “The Board takes seriously its obligation to operate a thriving gaming industry and to protect Nevada citizens,” chairman Mike Dreitzer said.
The dispute revolves around “event contracts” — derivatives that pay out depending on whether a specific real-world event occurs. Coinbase has been expanding beyond crypto trading, offering event contracts linked to outcomes as part of its bid to capture more retail trading activity. 3
Coinbase pushed back against Nevada’s action in a statement shared by PYMNTS. Ryan VanGrack, the company’s vice president of litigation, slammed it as a “state power grab” and a “manufactured emergency,” asserting that Congress granted the U.S. Commodity Futures Trading Commission sole authority over event contracts. 4
Nevada is seeking emergency relief from the court, pushing for a temporary restraining order and a preliminary injunction to stop contracts linked to sporting events, Cointelegraph reported. 5
Crypto markets dragged the mood. Bitcoin slipped 3.4%, hitting around $72,992, while ether dropped 3.8% to about $2,140. These declines often stoke worries over weaker spot trading volumes, putting exchange stocks under pressure.
Shares of other retail-trading firms followed suit. Robinhood Markets dropped 7.4%, while Strategy, which leans heavily on bitcoin, slid 3.2% in after-hours trading.
Dip-buying showed up on Tuesday as Cathie Wood’s ARK Invest picked up 3,510 shares of Coinbase, according to Investors.com’s daily trade count of ARK’s moves. 6
The risk remains that additional states could follow Nevada’s lead, or courts might side with state gambling regulations over federal derivatives rules. This could force Coinbase to withdraw or overhaul products it counts on for growth. A swift victory would help limit the damage, but an injunction could hit hard and fast in a critical test case.
Coinbase’s upcoming catalyst arrives Feb. 12, when the company will release its Q4 and full-year 2025 earnings after the market closes. A webcast is set for later that day. 7
