Coinbase Says New York Prediction-Market Suit Moved to Federal Court

JOON HYOUNG LEE

Summary

New York sued Coinbase over its prediction market service for violating the state’s gambling law, and the case has been moved to federal court.
The New York attorney general asked the court to impose fines, seek disgorgement and order user compensation over Coinbase’s offering of prediction-market products without a license and its provision of the service to users ages 18 to 20.
Coinbase said jurisdiction over prediction markets belongs to the CFTC, not New York state, and that the products should be regulated under federal law. It said it will continue fighting for federal oversight.

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A New York lawsuit over the prediction-market service offered by US crypto exchange Coinbase has been moved to federal court.

Paul Grewal, Coinbase’s chief legal officer, wrote on X on April 22 that a suit brought by New York Attorney General Letitia James had been transferred from state court. The New York attorney general recently sued Coinbase Financial Markets and Gemini Titan, alleging violations of the state’s gambling law.

New York alleges that Coinbase offered prediction-market products that let users bet on the outcomes of real-world events, including elections and sports, without a state license. The state also says the service was available to users ages 18 to 20. Prosecutors asked the court to impose fines on Coinbase, order disgorgement and require compensation for users.

Coinbase argues that jurisdiction over prediction markets rests with the Commodity Futures Trading Commission rather than state authorities. It says the products should be regulated under federal law. “Prediction markets are nationally available exchanges overseen by the CFTC,” Grewal wrote. “Coinbase will keep fighting to ensure federal oversight of prediction markets, as Congress intended.”

Coinbase launched its prediction-market service in January across all 50 US states, including New York. There are currently 11 states pursuing legal action against prediction-market platforms in the US.