Coinbase opened an investigation after its artificial intelligence mistakenly sent a notification to millions of users. The alert claimed that Norway had beaten Brazil 3-2 in the FIFA World Cup before the match even started at MetLife Stadium.
The message also said that Erling Haaland, a forward for Manchester City, had scored two goals and secured the Norwegian team’s qualification for the quarterfinals. The incident quickly went viral on social media and raised doubts about the reliability of artificial intelligence tools applied to prediction markets and the cryptocurrency market.
The most curious detail is that Coinbase’s own prediction page stated that the match had been postponed due to weather conditions. When the matchup finally took place, Norway did in fact defeat Brazil, but with a score different from what the AI had reported. Coincidentally, Haaland also scored two goals.
The error was initially identified by Jay Drain Jr., managing partner at Relay Digital. In a post on the X network, he said that Coinbase’s AI was “hallucinating results for a World Cup game that hadn’t even happened yet.” The executive described the notification sent to users as “factually incorrect” and also “dangerous and irresponsible.”
Shortly afterward, Coinbase CEO Brian Armstrong responded to the post and said the company had started an analysis of the incident. Following that, Max Branzburg, the company’s director of products for consumers and businesses, confirmed that the team removed the incorrect information and implemented adjustments to reduce the possibility of new failures.
“It’s amazing to see the power of artificial intelligence (AI) providing insights 24 hours a day, 7 days a week for the financial market, but obviously we still need to tune it to handle this kind of problem,” Branzburg said. “And look, Norway won and Haaland scored two goals, so maybe the AI knew something we didn’t!”
While Coinbase worked to fix the glitch, prediction markets continued to record strong movement during the World Cup. Investors’ interest drove trading volume on the main platforms specialized in sports events.
Among the cases that drew the most attention is that of a Polymarket trader identified as “Coldsway”. In just ten days, he racked up losses of US$ 11,63 million after placing bets on World Cup matches.
Records show the investor moved US$ 48,19 million across 15 football markets. Of those transactions, only four ended in profit, while another 11 resulted in losses, representing a hit rate of only 26,7%.
The most profitable bet returned US$ 1,12 million after an investment of US$ 689.318 on the draw between Australia and Egypt. Another operation generated a gain of US$ 962.940 by predicting that Egypt would not win the match played on 3 de julho.
Despite these wins, the losses were much larger. The worst operation ended with a loss of US$ 4,95 million after Morocco beat Canada 3-0. The investor also lost US$ 3,10 million in another bet involving the Canada vs. South Africa matchup, ending a streak of negative results in prediction markets tied to cryptocurrencies.