The crypto marketplace published a news update despite its own prediction market listing indicating a delay.
Coinbase's AI made a costly mistake during the World Cup, publishing a fake breaking news alert that Norway had already beaten Brazil 3-2 before the match had even kicked off.
The AI claimed Erling Haaland scored twice to seal the victory. The problem? The game had been delayed due to severe weather at MetLife Stadium in New Jersey. Coinbase's own prediction market page correctly showed the match hadn't started.
When the game was eventually played, Norway did win and Haaland did score twice—but the final score was 2-1, not 3-2. That distinction matters. In prediction markets, a single incorrect goal can determine whether bettors win or lose significant amounts of money, particularly as online betting continues to expand among younger audiences.
Coinbase, the largest publicly traded US cryptocurrency exchange, recently expanded into prediction markets through its partnership with Kalshi, adding another layer to its growing financial services ecosystem.
The false AI-generated update spread rapidly across social media, with critics calling it reckless and warning about the risks of publishing fabricated information in financial and betting markets. Coinbase CEO Brian Armstrong responded on X, saying the company was reviewing the incident.
Coinbase later pointed to a statement from Max Branzburg, Head of Consumer Products, who confirmed the incorrect story had been removed and that safeguards had been introduced to reduce similar errors. He joked that because Norway ultimately won and Haaland scored twice, "maybe the AI knew something we didn't."
It didn't.
Large language models cannot predict future events. They don't possess knowledge, foresight, or intuition. They generate responses by identifying statistical patterns in training data, which can lead to convincing but entirely fabricated outputs—commonly known as AI hallucinations. When asked to provide an answer to an event that hasn't happened, an LLM often generates the most statistically plausible scenario rather than admitting uncertainty.
A 3-2 Norway victory with two Haaland goals was believable because it fit historical patterns. It wasn't a prediction. It was a fabrication.
Whether this incident changes Coinbase's AI strategy remains to be seen. The company has continued to deepen its AI ambitions, including launching Coinbase for Agents, a platform that enables AI agents to execute financial transactions within user-defined limits. As AI takes on greater responsibility in financial products, accuracy is no longer a nice-to-have—it is essential.