New York Attorney General Letitia James filed lawsuits against cryptocurrency exchanges Coinbase Global and Gemini on Tuesday, April 21, 2026. The legal actions allege that the companies are operating illegal gambling platforms through their prediction market services. According to the filings, these markets allow users to bet on the outcomes of various events, including sports, entertainment, and elections, without the proper state authorization.
Following the announcement of the lawsuits, Coinbase Global shares declined 6.1% to close at $198.65. Shares of Gemini, which the state identifies as Gemini Space Station in the filings, fell 3.3% to $4.51.
The Attorney General’s office contends that the prediction markets offered by the two firms fit the legal definition of gambling under New York state law. The complaints allege that the platforms are in violation of state statutes because they have not obtained the necessary licenses from the New York State Gaming Commission. Furthermore, the lawsuits point out that the prediction markets are accessible to users between the ages of 18 and 20, which is below the legal gambling age of 21 in New York.
In a public statement, Attorney General James said that gambling by another name is still gambling and is not exempt from regulation under state laws and the New York Constitution. The lawsuits seek court orders that would require both Coinbase and Gemini to pay significant fines, forfeit profits deemed illegal, and provide restitution to affected customers.
Coinbase Chief Legal Officer Paul Grewal responded to the allegations by stating that the company’s prediction markets are federally regulated national exchanges. Grewal noted that these platforms are registered with the Commodity Futures Trading Commission (CFTC). This defense suggests a jurisdictional conflict between federal commodities regulation and state-level gambling enforcement.
The lawsuits represent a significant escalation in the regulatory oversight of the cryptocurrency industry in New York. While prediction markets have gained popularity as a way for users to speculate on real-world events, the state argues that they must operate within the existing framework of gaming laws. The outcome of these cases could determine the extent to which state regulators can oversee platforms that claim federal oversight.
The legal proceedings are expected to focus on whether the specific mechanics of these prediction markets constitute contests of chance as defined by New York law. As of the close of business on Tuesday, Gemini had not provided further comment on the litigation beyond the initial market response.