Coinbase Deepens Prediction Market Play with Strategic Buy

Coinbase has agreed to acquire The Clearing Company as the crypto exchange accelerates its expansion into event-based trading. The deal marks the exchange’s tenth acquisition announcement in 2025 and supports its broader “everything exchange” strategy.

First we announced prediction markets on Coinbase.

Now we’re bringing in the specialized talent to take our plans to the next level.

Welcome to Coinbase, @theclearingco. pic.twitter.com/KfRZSp9w9j

— Coinbase 🛡️ (@coinbase) December 22, 2025

The acquisition follows Coinbase’s prediction markets launch last week. Users can now trade on real-world outcomes including elections, economic data, and sports. These markets operate alongside crypto, derivatives, and equities on the same platform.

The Clearing Company was founded earlier this year by Toni Gemayel. He previously served as head of growth at both Polymarket and Kalshi. The startup raised $15 million in seed funding in August from investors including Coinbase Ventures.

The transaction includes a mix of cash and Coinbase stock. A company spokesperson described the deal value as “immaterial.” The acquisition is expected to close in January following customary closing conditions.

Coinbase Talent Acquisition Fuels Prediction Market Expansion

Nearly the entire Clearing Company team will join Coinbase following the acquisition. The startup employed around 10 people focused on building an onchain, regulated prediction markets platform.

Gemayel expressed enthusiasm about reaching a larger audience through Coinbase’s global infrastructure. He emphasized that prediction markets perform best when strong market structure meets real distribution.

Max Branzburg, Coinbase’s vice president of product management, highlighted the strategic rationale. He noted that more of the financial system is moving onchain, with prediction markets representing part of that shift.

We’re welcoming The Clearing Co to Coinbase to innovate on the frontier of Prediction Markets and accelerate the Everything Exchange.

You will not want to miss what @tonigemayel and team cook up at Coinbase! https://t.co/o87OzEocLk

— Max Branzburg (@maxbranzburg) December 22, 2025

Coinbase initially sourced liquidity from Kalshi at launch. The company has stated plans to expand offerings over time. This includes adding support for additional platforms and market types.

Prediction markets have gained renewed momentum across the crypto industry. Exchanges and fintech platforms seek expansion beyond spot trading into higher-engagement products tied to real-world events.

Polymarket and Kalshi, the two largest prediction markets, posted record activity last month. Combined trading volumes reached approximately $8 billion in November, according to The Block’s Data Dashboard.

The Clearing Company acquisition joins a string of Coinbase deals closed in 2025. Earlier acquisitions include Roam, Spindl, Iron Fish, Deribit, Opyn Markets, Liquifi, Sensible, Echo, and Vector.fun.

Branzburg stated that combining The Clearing Company’s expertise with Coinbase’s platform can help bring the category to a wider audience. The company also aims to support builders who want to innovate on top of prediction market infrastructure.

Legal Battles Accompany Market Growth

Meanwhile, Coinbase has filed lawsuits against three U.S. states over prediction market regulation. The exchange is targeting Connecticut, Illinois, and Michigan in a challenge to state-level oversight.

Chief Legal Officer Paul Grewal announced the legal action on Friday. The lawsuits argue that prediction markets fall under exclusive CFTC jurisdiction. State gaming regulators have moved to block such services, classifying them as gambling operations.

Today @coinbase filed lawsuits in CT, MI, and IL to confirm what is clear: prediction markets fall squarely under the jurisdiction of the @CFTC, not any individual state gaming regulator (let alone 50). State efforts to control or outright block these markets stifle innovation…

— paulgrewal.eth (@iampaulgrewal) December 19, 2025

Grewal pushed back against the gambling characterization. He emphasized that prediction markets function as neutral exchanges matching buyers and sellers. This differs from casinos that profit when customers lose.

The lawsuits center on whether prediction markets qualify as derivatives or gambling products. Coinbase argues Congress deliberately excluded certain underliers from its commodity definition. This leaves everything else under federal CFTC oversight.

The federal versus state regulatory battle could shape the future of prediction markets in the United States. Coinbase’s aggressive legal and acquisition strategies position the exchange at the center of this emerging financial category.