Coinbase is acquiring The Clearing Company, a startup focused on prediction markets that encompasses various domains such as digital assets, politics, sports, and culture, in an effort to enhance its portfolio beyond conventional crypto trading.

In a public statement, Coinbase revealed it has signed a definitive deal to buy The Clearing Company, aiming for the transaction’s completion in January, although the financial details remain confidential.

This move signifies a swift progress for The Clearing Company, established only earlier this year, which had previously received investments from Coinbase Ventures during a $15 million funding round along with other notable investors.

The Clearing Company is recognized for its on-chain prediction markets platform developed by experts from the crypto and prediction markets sectors. Its founder, Toni Gemayel, has prior experience with prediction market services such as Polymarket and Kalshi. The team comprises individuals with backgrounds at firms like Polymarket, 0x, Dune, and Coinbase.

The announcement comes shortly after Coinbase’s introduction into prediction markets, aligning with its broader “Everything Exchange” strategy in collaboration with Kalshi, as it also plans to launch stock trading to extend its product offerings.

Such developments indicate a shift towards more regulated event-based markets, leveraging cryptocurrency infrastructure as a core foundation for emerging market types.

“The Everything Exchange is a unified platform to trade crypto, equities, and everything else people want to trade,” stated Max Branzburg, Coinbase’s vice president of product management. “Prediction markets are an important part of that platform.” (Translation: “La Bourse de Tout est une plateforme unifiée pour échanger des crypto-monnaies, des actions et tout ce que les gens veulent échanger. Les marchés de prédiction font partie intégrante de cette plateforme.”)

A Coinbase spokesperson underlined that markets tied to actual outcomes are viewed as a natural evolution of current financial infrastructure.

This acquisition unfolds amid a transforming regulatory landscape, highlighted recently by The Clearing Company’s application to the US Commodity Futures Trading Commission to become a Derivatives Clearing Organization, potentially integrating prediction markets into established financial structures.

Coinbase perceives prediction markets as a substantial growth avenue rather than just a niche, as outlined in their recent market outlook report.

The report noted that prediction markets are gaining attention among users due to regulatory clarity and growing real-world applications.

Notably, Coinbase pointed to a tax measure in US President Donald Trump’s “One Big Beautiful Bill,” which could mean that taxpayers face taxation on “phantom income” even when net earnings are low or losses are incurred.

Offering a strategic edge, Coinbase believes prediction markets, which utilize contracts somewhat akin to derivatives, could serve as a more tax-efficient choice over conventional sportsbooks and casinos if recognized differently under tax regulations.