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Coinbase faced sharp criticism this weekend after an AI-generated alert on its prediction markets reportedly declared a false World Cup result, saying Norway had beaten Brazil before the match was played.
The notification claimed Norway won 3-2, with striker Erling Haaland scoring twice, and framed the fabricated outcome as breaking news. Users flagged the alert on social media, where critics called it dangerous and irresponsible.
Users accuse Coinbase of hallucinating results for a game that had not started, delivering factually incorrect alerts to millions of customers.
The knockout-stage fixture was set for Sunday at MetLife Stadium in New Jersey. Coinbase's own market page listed the match under a weather delay, so no result existed when the alert went out.
Coinbase Chief Executive Brian Armstrong responded within hours, acknowledging the reports publicly.
"Taking a look with the team - thx for reporting it," Armstrong responded in his first public comment on the error.
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The timing is awkward. Armstrong has promoted prediction markets as a reliable way to surface facts. He argues financial stakes produce better information than traditional media.
"Prediction markets are the ultimate form of truth seeking. When there's skin in the game, the output is far more reliable," Armstrong stated in January.
However, those words now sit beside an AI system that invented, or rather, "hallucinated" a result. Coinbase's 2025 shareholder letter also calls being the "most trusted name in crypto" its core strategy.
That pitch has drawn scrutiny before. In late 2025, Armstrong read out words that traders had bet he would say on an earnings call. The move nudged a market tied to his own remarks.
"And I just want to add here the words Bitcoin, Ethereum, Blockchain, Staking, and Web3 to make sure we get those in before the end of the call," Armstrong stated, blurting out the predicted words without any apparent context.
The mishap also lands as Coinbase leans hard into AI. Armstrong fired engineers in 2025 who refused to use new coding assistants.
He said in September that about 40% of daily code was AI-generated, with a target above 50%. The firm has since cut its AI costs while adding automated features.
Coinbase rolled out prediction markets across the US as part of its Everything Exchange. Early market flow was powered by Kalshi, a partner in the prediction market race.
The exchange has also fielded betting promotion concerns in its consumer app. In March, Armstrong addressed a separate targeting bug that pushed unwanted alerts.
"Looks like there was a bug on targeting for these push notifications - getting fixed now...The alternative is for us to apply a heavy hand and dictate what customers should or should not trade and I don't think people want that either - too paternalistic, and anti free market," he said.
Meanwhile, the error revives questions about AI safeguards in financial products used by millions.
The company will likely disable automated match alerts until it can verify outcomes. Past fixes suggest a patch and an apology could follow. Repeated failures, however, point to deeper product strain.
Coinbase and Armstrong did not immediately respond to BeInCrypto's request for comment.
