Coinbase and Gemini Hit With Lawsuits Over Prediction Markets in New York

TLDR

• New York Attorney General Letitia James has sued Coinbase and Gemini for running unlicensed prediction markets
• The state claims both platforms operated illegal gambling products without licenses from the NY Gaming Commission
• The suits seek to recover illegal profits, restitution, and ban users under 21 from accessing the platforms
• Other states including Nevada and Washington have filed similar lawsuits against prediction market providers
• The CFTC argues it has sole federal jurisdiction over prediction markets, creating a clash with state regulators

New York Attorney General Letitia James filed lawsuits against Coinbase Financial Markets and Gemini Titan on April 21, 2026, accusing both crypto exchanges of running unlicensed gambling operations in the state.

The lawsuits claim that both companies failed to obtain licenses from the New York State Gaming Commission before offering prediction market products to users in New York.

The complaints describe users of these platforms as “bettors” and state that “each contract is a bet.” The suits allege the platforms allowed people between 18 and 21 to place bets, which violates New York law that bars anyone under 21 from mobile gambling apps.

The state is seeking to recover alleged illegal profits, restitution, and wants both companies barred from offering these products to anyone under 21.

Coinbase Chief Legal Officer Paul Grewal pushed back on the lawsuit, posting on X that “prediction markets are federally regulated national exchanges.” He said Coinbase would fight for federal oversight of the sector.

Gemini declined to comment.

A Growing Legal Battle Between States and Federal Regulators

New York is not the first state to take this position. Nevada, Washington, and several other states have filed similar lawsuits, arguing that sports-related prediction contracts are bets, not federally regulated financial swaps.

The cases are now before multiple appeals courts and could eventually reach the U.S. Supreme Court.

At the federal level, Commodity Futures Trading Commission Chairman Mike Selig has argued that prediction markets, including sports contracts, fall under the CFTC’s “exclusive jurisdiction.”

The CFTC has filed suit against Arizona, Connecticut, and Illinois to stop them from bringing charges against prediction market providers. It also filed to join a case in Nevada to defend those providers.

Where Other Platforms Stand

Kalshi, one of the largest prediction market operators, was not named in Tuesday’s lawsuits. The company had already sued the New York State Gaming Commission last fall, asking a federal court to rule that state gambling laws do not apply to its platform. That case is still being heard in the Southern District of New York.

Polymarket has taken a similar approach, filing a lawsuit against Massachusetts arguing the state lacks authority to regulate prediction markets that the CFTC has already approved.

The New York lawsuits against Coinbase and Gemini were filed on April 21, 2026, and both cases are now before the courts.

The post Coinbase and Gemini Hit With Lawsuits Over Prediction Markets in New York appeared first on CoinCentral.