Coinbase Acquires The Clearing Company to Expand Prediction Markets Reach

The acquisition puts Coinbase one step closer to owning the full tech stack for its “Everything Exchange.”

Coinbase, one of the leading cryptocurrency exchanges in the world, continues to branch further into the prediction marketspace. Nearly a week after announcing that customers would soon be able to trade on the outcomes of real-world events, Coinbase revealed on Monday that they acquired the prediction market infrastructure startup, The Clearing Company.

Coinbase called The Clearing Company “a startup with a strong vision for the future of prediction markets,” one that is led by “prediction market veterans,” including its founder, Toni Gemayel.

Coinbase credits Gemayel — formerly the head of growth at both Polymarket and Kalshi, and a self-described “fullstack growth marketer turned founder” — as a “visionary product and growth leader who helped shape the modern prediction markets landscape.”

With the acquisition, Coinbase plans to have Toni and his team help “scale world-class prediction markets trading on Coinbase and accelerate our ambitions for this exciting category as part of the Everything Exchange.”

Next step in Coinbase’s “everything” trading app vision

“The Everything Exchange will be the unified place where people can trade every asset class,” read the announcement. “Prediction markets are a natural fit for this vision. Bringing together regulated market access and deep event-contract expertise sets us up to expand over time, and we’re excited to work with The Clearing Co. team to build this next chapter at Coinbase.”

One didn’t need to wager that much on a prediction market to see this acquisition coming. The Clearing Company launched earlier in the year, raising $15 million in seed funding with participation from Coinbase Ventures, according to Coinpaper. The publication also noted that “Coinbase confirmed that the deal involves a mix of cash and company stock” and that the entire Clearing Company team will join Coinbase.

Most importantly, the Clearing Company recently applied with the U.S. Commodity Futures Traducing Commission to become a become a Derivatives Clearing Organization in November, according to the Wall Street Journal.

Coinbase wants to own the full stack

Like Robinhood and other DeFi companies competing for the ultimate all-in one trading app, Coinbase is also looking to own the full stack, including tech and clearing services. That’s where TCC fits in.

The Clearing Company set out to focus on providing the underlying infrastructure to power and process bets, instead of building a website and app of its own. TCC didn’t want to compete with Kalshi, Polymarket and the growing number of emerging exchanges. As Gemayel put it: “We want to be Switzerland.”

Brokerages can thus plug into The Clearing Company’s technology to offer access to predication markets alongside stocks, crypto and other trading markets.

Coinbase made prediction markets a key part of its Dec. 17th “System Update.” The crypto giant said the expansion would allow customers to “manage your prediction market positions alongside your existing crypto, equities, and cash balances in the same trusted, simple, and unified interface you know.”

“A wider marketplace for predictions creates an avenue for more informed trading activity,” read the announcement, “and we plan to support contracts from additional prediction market platforms in the coming months.”