NY Attorney General Sues Coinbase, Gemini, Seeks $3.4B

New York Attorney General Letitia James filed separate lawsuits on Tuesday in Manhattan state court against Coinbase and Gemini, alleging the firms’ prediction markets function as illegal gambling. The state seeks at least $2.2 billion from Coinbase and $1.2 billion from Gemini.

The complaints allege the platforms offered wagers on sports, entertainment and political outcomes and allowed New Yorkers as young as 18 to participate, under the state’s legal gambling age of 21. New York asks for disgorgement of revenues linked to the contested markets and injunctive relief to stop the offerings.

The filings note New York’s disgorgement rules allow the state to pursue funds it considers ill-gotten nationwide, not only for activity inside New York.

In a statement, James wrote, “Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and constitution. Gemini and Coinbase’s so‑called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails.”

Coinbase responded through Chief Legal Officer Paul Grewal on X, stating the markets are regulated at the federal level by the Commodity Futures Trading Commission and that the issue is already before federal courts. Grewal wrote that Coinbase “will continue to fight for the federal oversight of [prediction] markets that Congress intended.”

Gemini did not immediately provide a public comment to the attorney general’s office.

The suits follow similar enforcement actions in other states. Nevada recently issued a temporary restraining order blocking a prediction market platform from offering certain contracts in that state pending further proceedings. Related cases are pending in federal and state courts over whether event contracts are regulated by the CFTC or by state gambling statutes.

New York’s complaints cover contracts beyond sports, citing markets tied to film awards, television outcomes and political events. The filings emphasize both the mechanics of the platforms and participation by underage users as bases for enforcement.

Courts have not resolved whether federal commodities law preempts state gambling rules for these markets. The filings add to a growing body of litigation over how event contracts and crypto-linked products should be regulated.