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Coinbase CEO Brian Armstrong has responded to public criticism after Zcash founder Zooko Wilcox highlighted the exchange prompting a young, financially vulnerable user to place bets on sports outcomes and Bitcoin prices inside the app. Coinbase had expanded its features to include stocks and prediction markets in December 2025.
Talked to a user (a vulnerable, young, unsophisticated, financially poor user) who has the Coinbase app, and it has started prompting them to gamble on sports and the price of Bitcoin. I hate this with a burning passion and it makes me ashamed to be part of this industry.
— zooko🛡🦓🦓🦓 ⓩ (@zooko) June 27, 2026
In a post on X, Wilcox described the incident as crossing an ethical line. Armstrong replied by defending the right of adults to make their own financial decisions, while conceding that aggressively promoting high-risk products to less experienced users raises valid concerns. He proposed clearer risk disclosures, AI-powered financial literacy tools, and more personalised user preference settings.
Armstrong outlined three practical measures. He called for clearer risk disclosures at the point of product access, AI-powered financial literacy tools built into the app, and user preference settings that let individuals choose which product categories appear during onboarding.
Interesting — and I appreciate the take.
I think there’s a balance here.
I’m pro-freedom. Consenting adults should be able to do what they want with their own money, as long as they’re not harming others. I don’t want companies patronizing users or dictating what they can do…
— Brian Armstrong (@brian_armstrong) June 28, 2026
Secondly, he positioned these as user-controlled features rather than platform restrictions, staying consistent with his belief in financial autonomy. Armstrong also pushed back on the strict line between investing and gambling, noting that early Bitcoin, Zcash, and even stock purchases could be seen as gambling by some. Risk, he argued, is contextual and depends on the product, the user, and the circumstances.
Armstrong’s stance is not unpopular, though it has often been viewed by regulators and consumer advocates as insufficient without stronger structural safeguards.
This is not the first time Coinbase is generating backlash over its prediction markets strategy. In March 2026, the exchange faced backlash for sending repeated push notifications promoting March Madness betting markets, sometimes three in one hour.
Armstrong called it a bug in the notification system at the time. However, the company has actively expanded into prediction markets through acquisitions and partnerships, making aggressive promotion part of its “everything exchange” vision.
River founder Alexander Leishman warned in April 2026 that pushing sports betting could harm the industry’s long-term reputation. Wilcox’s recent call-out suggests those concerns have not gone away.
The incident comes as Coinbase pushes deeper into prediction markets while U.S. US regulators continue to debate how sports event contracts should be classified and overseen. The CFTC and state authorities are actively contesting jurisdiction, leaving the regulatory picture unclear.
Coinbase $COIN is right at its multi-year support.
Losing this will result in a brutal dump like $MSTR. pic.twitter.com/VQDnpPAxGL
— Ted (@TedPillows) June 26, 2026
For Coinbase shareholders, analysts are watching for how prominently betting-style products feature in future marketing, and whether any regulator moves to restrict their promotion or availability to retail users.
Armstrong’s acknowledgment that platforms should treat vulnerable users differently from experienced ones is the right response. The key question now is whether Coinbase translates that view into actual product design changes, or whether it remains just a public statement.
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