New York sues Coinbase and Gemini over prediction markets, calls offerings illegal gambling

New York Attorney General Letitia James filed separate lawsuits Tuesday in Manhattan Supreme Court against Coinbase Financial Markets and Gemini Titan LLC, alleging their prediction-market products amount to illegal, unlicensed gambling in the state. The complaints seek disgorgement of profits, civil penalties equal to three times those profits, restitution for customers, and restrictions that would bar the companies from serving users under 21 or marketing on college campuses. Coinbase Chief Legal Officer Paul Grewal said prediction markets are "federally regulated national exchanges, registered with the CFTC," adding that the company will "continue to fight for the federal oversight of these markets that Congress intended." The filings arrive amid intensifying tensions between federal and state regulators. On April 2, the CFTC sued Arizona, Connecticut, and Illinois to stop them from regulating prediction markets.