New York AG Files Lawsuits Against Coinbase and Gemini for Unlicensed Prediction Markets

New York Attorney General Letitia James filed lawsuits against Coinbase Financial Markets and Gemini Titan, alleging that the firms violated state gambling laws by offering prediction market products without proper licensing. According to court filings cited by Reuters, New York claims that Coinbase Financial Markets and Gemini Titan failed to obtain approval from the New York State Gaming Commission.

' The lawsuits seek to recover illegal profits generated from the prediction market offerings by Coinbase Financial Markets and Gemini Titan.

Regulators are pushing to block Coinbase Financial Markets and Gemini Titan from making prediction market products available to individuals under 21 years of age. Separately, Kalshi stated in regulatory filings on Wednesday that it suspended three congressional candidates for placing bets on their own races.

The suspended candidates identified in Kalshi's filings are Ezekiel Enriquez from Texas, Matt Klein from Minnesota, and Mark Moran from Virginia. The suspensions by Kalshi were reported as part of its compliance with regulatory requirements. No further details on the specific bets or the amounts involved were provided in Kalshi's filings.

Kalshi did not specify the duration of the suspensions or any appeals process available to the candidates. Kalshi operates as a platform where users can bet on the outcomes of various events, including political races. Platforms such as Polymarket and Kalshi have gained traction by offering contracts tied to politics, sports, and other public events.

The Commodity Futures Trading Commission has asserted jurisdiction over event contracts under the Commodity Exchange Act. Polymarket has filed a lawsuit against Massachusetts, arguing that states lack authority to regulate prediction markets that fall under federal oversight.