Svmuu News Letitia James has filed lawsuits against Coinbase and Gemini, alleging that they provide "disguised gambling" services through their prediction market platforms, violating New York state law.
Regulators argue that this type of trading based on event outcomes (such as sports, elections) is essentially a form of gambling activity. They particularly question the platforms allowing participation from users aged 18 to 21, while New York law sets the minimum age for sports betting at 21. Prosecutors are seeking substantial fines and the disgorgement of profits, including claims of at least $2.2 billion from Coinbase and at least $1.2 billion from Gemini.
The two companies have not yet formally responded, but Coinbase stated that prediction markets are regulated by the Commodity Futures Trading Commission, implying their legality falls under federal jurisdiction.