Is Coinbase legal in Michigan?

Coinbase does not list contracts itself. Coinbase Financial Markets, Inc. is a futures commission merchant, registered with the CFTC and the National Futures Association since August 16, 2023, and it gives customers access to event contracts listed on Kalshi's exchange (complaint, ¶¶ 5, 15).

It went to court before Michigan acted against it. On December 18, 2025 it sued Attorney General Dana Nessel and the Gaming Control Board's chair, members and executive director in the Eastern District of Michigan (No. 4:25-cv-14092), and moved for a preliminary injunction the next day. On January 12, 2026 Judge Shalina Kumar entered the parties' agreement that the state would take no enforcement action over Coinbase's event contracts while that motion was pending, with 48 hours' notice first if it changed course (ECF 25, p.2).

After argument on June 24, Judge Kumar denied the motion on August 6, and issued a 46-page amended order the following day. "In sum, Coinbase fails to show that sports event contracts qualify as swaps under the CEA," she wrote (p.29), and she went on to hold that even if they were swaps, the Commodity Exchange Act would not preempt Michigan's gambling laws, expressly or by implication (pp.29-45). Coinbase filed its notice of appeal the same day, and on August 21 the district court paused the case until the appeal is resolved.

Then a state court acted against Kalshi, the exchange behind Coinbase's contracts. On September 1, 2026 the Ingham County Circuit Court enjoined Kalshi from offering sports-related event contracts in Michigan; Kalshi in Michigan covers that order.

Three weeks after the Kalshi injunction, the parties filed a stipulation that Judge Kumar signed as an order (ECF 65, p.5). Its terms:

• Sports contracts stop. Coinbase "agrees to cease offering new sports-related event contracts in Michigan that are traded on any DCM, including KalshiEX LLC, by 12:00 AM Eastern time on October 10, 2026" (p.5). Nothing outside sports is named.
• The state forbears. While Coinbase complies, the defendants "will forbear from pursuing any Enforcement Actions" against Coinbase or its affiliates over sports-related contracts (p.4).
• Notice before any enforcement. If the state thinks Coinbase is out of compliance, it must say so in writing, give Coinbase ten days to respond or comply, and meet and confer in good faith before acting (p.4).
• No one gives up an argument. Every term is "without prejudice to any party's rights, obligations, or defenses" (p.5).

The Gaming Control Board announced the agreement on October 7, 2026, three days before the deadline. Robinhood signed a parallel agreement in its own Michigan case earlier in September; Robinhood in Michigan has its terms.

Clause 3 of the stipulation covers them. Coinbase agreed "to close any open sports-related event contracts held by Michigan residents (i.e., contracts opened on or before October 9, 2026, which remain open and which the customer has not closed out voluntarily) by 12:00 AM Eastern time on October 10, 2026" (ECF 65, p.5). Customers were free to close their own positions before then.

The stipulation does not say at what price Coinbase would close a contract, and it does not mention withdrawals. As of October 24, 2026, we have not found a court filing or state release reporting how the close-out went. The state of every other Coinbase market is on Coinbase's legal status page.

The stipulation runs until "the first to occur of" two events (ECF 65, p.5):

1. A final appeal. The Sixth Circuit finally resolves any one of four appeals: Coinbase's own (No. 26-1693, docketed August 10, 2026), Polymarket US's (No. 26-1552), Robinhood's (No. 26-1542), or Kalshi's consolidated Ohio and Tennessee appeals (Nos. 26-3196 and 26-5235). If a party seeks Supreme Court review, resolution means a denial of certiorari or a decision there.
2. The Kalshi injunction ends. The Ingham County court dissolves its injunction in Nessel v. KalshiEX (No. 26-1087-CZ).

The Kalshi appeals are furthest along. Two days after the stipulation, on September 25, the Sixth Circuit held that Kalshi had not shown its sports contracts are swaps, and in the alternative that federal law does not preempt Ohio's or Tennessee's gambling laws (opinion). Kalshi asked for rehearing on October 9 (petition), so that appeal is not yet final; Kalshi in Ohio follows the petition. The Robinhood and Polymarket US appeals will go to the same panel on the same day (ECF 65, p.3); Polymarket in Michigan tracks them. We found no decision in Coinbase's own appeal.

Coinbase is not a party to the preemption petitions now at the Supreme Court; the petitions at the Supreme Court are followed together.

Before Judge Kumar, Michigan's officials argued that sports event contracts are not swaps and that the Commodity Exchange Act leaves the state's gambling laws in place either way. Coinbase argued the contracts are swaps on a CFTC-designated exchange, which state gambling law cannot reach. Her ruling and the stipulation decide whether Coinbase may offer the contracts in Michigan without the state's permission while the appeals run. They say nothing about federal income tax, and the IRS has not issued guidance on event contracts.

So a year of Kalshi contracts traded through Coinbase still has to be reported one way or another. Among the people we've seen file, three ways come up most often: as wagering gains and losses under section 165(d), as capital gains and losses on Form 8949, or as Section 1256 contracts with the 60/40 split on Form 6781. Each is walked through, with worked years, in the Tax Center.