Coinbase's acquisition of Polymarket's former team escalates the "arms race" in prediction markets.

Original author: ChandlerZ, Foresight News

On December 22, Coinbase announced that it had reached an agreement to acquire The Clearing Company, with the transaction expected to close in January. The Clearing Company team will join Coinbase to help expand its product offerings. A spokesperson declined to disclose the transaction amount, calling it "insignificant," and confirmed that the deal includes a combination of cash and Coinbase stock.

While the specific financial terms of the acquisition have not been disclosed, it marks Coinbase's shift from simple distribution partnerships to a deeper integration of technology and talent in the growing prediction market space.

Just a week before the deal was announced, Coinbase launched a partnership with Kalshi, a CFTC-regulated prediction platform, allowing its users to access Kalshi's marketplace through the Coinbase interface. This acquisition of The Clearing Company is seen by the market as a further step by Coinbase to acquire underlying technology and strengthen its internal product development capabilities.

The "hybrid genes" of Polymarket and Kalshi

In August 2025, The Clearing Company completed a $15 million seed funding round, led by Union Square Ventures, with participation from Haun Ventures, Variant, Coinbase Ventures, Compound, Rubik, Earl Grey, Cursor Capital, and Asylum. The company has not yet announced a platform launch timeline, but emphasizes its focus on designing products that balance simplicity and compliance.

Although this is an early-stage startup, its team composition has a significant background advantage in the prediction market field.

According to its official website, The Clearing Company's core team consists of several former executives and technical experts from Polymarket and Kalshi. The company's founder and CEO, Toni Gemayel, is a veteran in the prediction market field. His resume shows that he previously served as Head of Growth at Polymarket and Kalshi. He also has experience designing the unicorn company Figma.

In addition, The Clearing Company’s core engineering team is mainly composed of early employees from Polymarket, and also includes some operations staff from Kalshi.

• Liam Kovatch (Engineering): Former Head of Engineering at Polymarket;
• Niraek Jain-Sharma (Product/Markets): Former Marketing Director at Polymarket;
• Sam Schwartz: Former Chief Compliance Officer at Kalshi;
• Nick Beattie and Daniel Ramirez: These two engineers also come from the Polymarket team and have experience developing for projects such as Raibow and Avara.

A Coinbase spokesperson told The Block that the startup has about 10 employees, and almost the entire team will join Coinbase as part of the deal.

In comparison, The Clearing Company, though a latecomer, started with far more substantial capital than Polymarket and Kalshi did in their early days. A comparison of the seed round funding data for the three companies clearly demonstrates the leap in valuation within the prediction market sector over the past five years.

The Clearing Company raised $15 million in seed funding led by Union Square Ventures even before its product was launched. This amount is almost four times that of Polymarket's seed round. This indicates that even before Coinbase's acquisition, the primary market already had extremely high expectations for this hybrid team.

Coinbase launches stock trading and prediction market services

At its System Update event on December 18, Coinbase announced a significant expansion of the range of assets it trades on its platform, including new services such as stock trading, prediction markets, new cryptocurrencies, and perpetual futures, aiming to solidify its market position as an "all-in-one exchange."

Coinbase will initially launch trading services for hundreds of stocks based on market capitalization and trading volume, with plans to add thousands more stocks and ETFs in the coming months. Users will enjoy zero-commission trading and trading 24/7, five days a week, without the time constraints of traditional markets. Furthermore, Coinbase has partnered with Kalshi, an $11 billion prediction market provider, to allow users to trade the outcomes of real-world events such as elections, sports, collectibles, and economic indicators.

Coinbase also launched Coinbase Advisor, an AI-powered wealth management tool, and Coinbase Business, a service for startups, further expanding its business scope. Company executives stated that these new features will be supported through the Coinbase Tokenize platform, an end-to-end institutional-grade platform designed for tokenized physical assets.

Coinbase, Kalshi, Crypto.com, Robinhood, and Underdog recently formed the Coalition for Prediction Markets. This national organization is dedicated to maintaining a safe, transparent, and federally regulated environment for prediction markets.

Coinbase is gradually downplaying its identity as a pure cryptocurrency exchange. With Robinhood and Interactive Brokers venturing into prediction markets, Coinbase must defend its territory. Having native prediction products will complement its spot, futures, and prediction market offerings, allowing users to complete everything from buying Bitcoin to hedging macroeconomic risks within a single account.

Predicting the next stage of competition in the market

The acquisition of The Clearing Company is Coinbase's tenth acquisition announced in 2025. Deals completed earlier this year include Roam, Spindl, Iron Fish, Deribit, Opyn Markets, Liquifi, Sensible, Echo, and Vector.fun.

From its distribution partnership with Kalshi to acquiring The Clearing Company's team and technology, Coinbase's path in the prediction market is clear: first, validate demand and product form through partnerships; then, internalize key capabilities through acquisitions; and finally, form a scalable, long-term business line.

Competition in the prediction market is shifting from who launches first to who can operate compliantly and sustainably in the long term. Coinbase's decision to integrate its people and technology into its system is clearly a strategic move to position itself for the next phase of licensing and institutional competition.