NY AG Sues Coinbase, Gemini Units for Unlicensed Prediction Markets

New York Attorney General Letitia James filed lawsuits on Tuesday against subsidiaries of two major cryptocurrency exchanges, Coinbase Financial Markets and Gemini Titan, accusing them of operating unlicensed prediction markets that violate state gambling laws. The complaints, lodged in Manhattan state court, mark the first significant state-level enforcement action targeting such platforms offered by large crypto firms.

The suits allege that the companies failed to obtain required licenses from the New York State Gaming Commission to run markets where users trade contracts based on the outcomes of events, including sports games and elections. James's office contends these so-called event contracts qualify as gambling under New York law because their results depend on chance or factors beyond participants' control. Additionally, the platforms permitted users aged 18 to 20 to participate, despite a state requirement that mobile sports betting be restricted to those 21 and older.

"These so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails," James said in a statement. The attorney general...