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NY sues Coinbase, Gemini for unlawful prediction markets. The state of New York is taking legal action against Coinbase and Gemini, alleging that their prediction market platforms operate without regulation and licensing, which the state argues constitutes illegal gambling activities. Attorney General Letitia James has initiated a lawsuit, filed on Tuesday in state court in Manhattan, aiming to prevent the companies' platforms from functioning within the state until they secure licenses from the state Gaming Commission. "Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution," James stated. "Gemini and Coinbase's so-called prediction markets are merely illegal gambling operations, putting young people at risk of addiction on platforms that lack essential safeguards." Messages seeking comment were left for Coinbase and Gemini. Initially, both companies operated as cryptocurrency trading platforms before expanding into the prediction market, a domain largely controlled by Kalshi and Polymarket. Gemini, established by siblings Cameron and Tyler Winklevoss, introduced Gemini Predictions in December. Coinbase launched its prediction markets service in January. "Crypto was just the beginning," Gemini's website stated on Tuesday, alongside a prediction box that offered bets on various events, including the winner of that day's Chelsea-Brighton Premier League soccer match, the confirmation date for Kevin Warsh as the chairman of the Federal Reserve, and the anticipated price of oil for Friday. New York's lawsuit alleges that Coinbase and Gemini are seeking "to avoid the legal and financial consequences" of the state's close regulation of gambling "by offering what is quintessentially wagering under the guise of offering event contracts' on a prediction market.'" By operating without licenses, the lawsuit states, Coinbase's and Gemini's prediction market businesses aren't paying the same taxes as licensed casinos and mobile sportsbooks, which are taxed by the state at a rate of approximately 51% of gross revenues. Furthermore, the lawsuit states that Coinbase and Gemini permit users as young as 18, despite state law prohibiting wagering by individuals under 21. In October, Kalshi initiated legal action against the state Gaming Commission following the commission's attempt to prohibit the company's prediction market operations within the state. In the ongoing case, Kalshi contends that, as a federally designated derivatives exchange, it falls under the exclusive jurisdiction of the federal regulator, the Commodity Futures Trading Commission. In December, Coinbase presented a similar argument when it initiated legal action against Connecticut, Michigan, and Illinois to prevent those states from regulating its prediction business. Earlier this month, the Commodity Futures Trading Commission initiated legal action against Arizona, Connecticut, and Illinois to prevent them from regulating prediction markets. Last week, a federal judge put a stop to Arizona's regulatory actions, which have involved criminal charges against Kalshi, determining that the federal commission had shown a reasonable likelihood of success in proving that the act supersedes Arizona law. Julie Young. Julie Young is a Senior Market Reporter and Analyst. She has been covering stock markets for many years.

New York sues Coinbase, Gemini over prediction market offerings. New York Attorney General Letitia James has sued Coinbase and Gemini over their prediction market offerings, alleging the platforms operated unlicensed event-contract products that the state considers akin to illegal gambling. What New York is alleging against Coinbase and Gemini. TLDR KEY POINTS * Plaintiff: New York Attorney General Letitia James * Named platforms: Coinbase and Gemini * Alleged conduct: Operating prediction market products classified as unlicensed event contracts comparable to sports betting The lawsuit, first reported by Bloomberg Law, targets both exchanges for offering prediction market products that the state considers illegal under New York law. The attorney general's office frames these products as event contracts that function similarly to sports betting. A press release from the attorney general's office warned New Yorkers about potential harms from sports betting and event-contract platforms, signaling the enforcement theory behind the case. What is confirmed vs. Developing. The existence of the lawsuit and the identity of the parties are confirmed through both the attorney general's press release and Bloomberg Law's reporting. Specific damages sought, the precise legal statutes cited, and whether the state is seeking injunctive relief to halt the products remain developing details. Why prediction market offerings face New York scrutiny. What prediction markets are. Prediction markets allow users to buy and sell contracts tied to the outcome of real-world events, from election results to sports outcomes. Users profit if their predicted outcome occurs. Coinbase describes its prediction market product as a way to trade on event outcomes directly through the platform. The growth of crypto-native prediction markets has accelerated in recent months, with platforms like Polymarket raising $400 million at a $15 billion valuation from backers including the NYSE's parent company. The regulatory tension. New York's enforcement theory appears to rest on classifying event contracts as a form of gambling rather than as financial instruments or commodities. The attorney general's press release explicitly groups prediction markets alongside sports betting, suggesting the state views wagering on event outcomes through crypto platforms as functionally identical to placing bets. This framing puts prediction market operators in a difficult position. At the federal level, the CFTC has allowed certain event contracts to trade on regulated exchanges, but New York state law may impose stricter requirements that crypto platforms have not met. What comes next for Coinbase, Gemini, and crypto prediction markets. The most immediate question is whether New York will seek to halt prediction market offerings to state residents while the case proceeds. A temporary restraining order or preliminary injunction could force both exchanges to restrict access for New York users. The Defiant reported on the lawsuit, underscoring that the case has drawn attention across crypto media as a potential precedent for how states regulate event-contract products offered by centralized exchanges. Both Coinbase and Gemini hold New York BitLicenses, but those licenses cover cryptocurrency trading and custody, not necessarily the operation of prediction market products. Whether existing licenses extend to event contracts is likely to become a central legal question. For the broader industry, the case could influence how other centralized platforms approach prediction market features. Exchanges weighing new product launches, including those exploring novel spot listings and other asset types, will be watching New York's enforcement action closely. The outcome could also carry implications for stablecoin issuers and market infrastructure providers operating in New York, as the attorney general's office may use this case to signal broader regulatory expectations for crypto products beyond simple trading. Coinbase and Gemini have not yet publicly detailed their legal response. The next procedural steps, including any court filings or motions, will determine the pace and scope of this case through mid-2026. Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.

A securities fraud class action lawsuit has been filed against Gemini Space Station, Inc. on behalf of investors who purchased GEMI Class A common stock between 12 September 2025 and 17 February 2026. Investors have until 18 May 2026 to seek lead plaintiff status. The lawsuit, filed in the US District Court for the Southern District of New York, alleges material misstatements in Gemini's IPO registration statement and prospectus. The complaint claims the company overstated the viability of its crypto platform business and international expansion prospects. Gemini's share price fell sharply following two announcements: a February corporate restructuring involving 25% workforce reduction and market exits, and the departure of three C-suite executives alongside disappointing financial results. The stock has declined 78.7% from its $28 IPO price to $5.96.