New York sues Coinbase and Gemini, seeking to halt unlicensed prediction market businesses

Key Points:

• New York Attorney General Letitia James has filed a lawsuit against Coinbase and Gemini, accusing them of operating illegal, unlicensed prediction market platforms that constitute gambling under state law.
• The lawsuit demands that both companies cease operations in New York unless they obtain proper licenses from the state Gaming Commission, highlighting concerns about exposing young users to addictive gambling-like platforms.
• Coinbase and Gemini, originally cryptocurrency trading platforms, expanded into prediction markets offering bets on events such as sports outcomes and financial indicators, allegedly avoiding gambling regulations and taxes imposed on licensed operators.
• The lawsuit also criticizes the companies for allowing users aged 18 and older to participate, whereas New York law prohibits gambling by anyone under 21.
• This legal action follows similar regulatory challenges faced by other prediction market firms like Kalshi, with ongoing debates over whether such platforms fall under state gambling laws or federal derivatives regulation by the Commodity Futures Trading Commission.