NY AG Sues Crypto Giants for Illegal Gambling

New York Attorney General Letitia James has filed lawsuits against cryptocurrency firms Coinbase and Gemini, alleging they operated illegal gambling platforms in the state. The suits claim these companies recently expanded into prediction markets, which are viewed by the AG's office as unlicensed gambling operations.

James stated that these "prediction markets" expose young people to addictive platforms without necessary guardrails. The state is seeking to force the companies to forfeit illegal profits, compensate affected consumers, and pay triple the amount of their illicit gains in fines.

This legal action highlights ongoing regulatory challenges surrounding both online gambling and the cryptocurrency industry. While many states have legalized online gambling, crypto has often been promoted as a space free from government oversight, leading to a rise in scams and risky practices.

Coinbase's chief legal officer argued that prediction markets are federally regulated national exchanges and that the company advocates for federal oversight. Gemini has not yet responded to requests for comment. The companies' move into prediction markets is seen as an attempt to avoid New York's stringent gambling regulations and associated tax rates.