Michigan Judge Deals Blow to Coinbase with Ruling Against Sports Contract Lawsuit

Coinbase stock dropped nearly 3% after a Michigan federal judge denied the company's request to stop state action over sports event contracts. The decision allows Michigan to continue enforcing its gambling law while the case moves ahead.

The court ruling comes in a closely watched legal fight, with Coinbase (COIN) arguing that sports event contracts should be regulated by the Commodity Futures Trading Commission under the Commodity Exchange Act instead of state gambling regulators.

Judge Shalina Kumar did not agree with Coinbase's argument, rejecting their request for a preliminary injunction and finding that the company had not shown it was likely to win the case. The judge also said following both federal rules and Michigan law would be possible, despite potential difficulties or costs.