Gemini

Polymarket

James

New York's attorney general has filed lawsuits against crypto exchange operators Coinbase Financial Markets and Gemini Titan for allegedly violating state gambling laws, according to court records cited by Reuters.
Copies of the complaints show the state alleges both exchanges failed to obtain licenses from the New York State Gaming Commission to operate their markets, Reuters <a href="https://www.reuters.com/legal/government/new-york-sues-coinbase-financial-markets-gemini-titan-allegedly-violating-state-2026-04-21/" rel="noopener noreferrer nofollow">reported</a>.&nbsp;
“Gambling by another name is still gambling, ​and it ​is not ⁠exempt from regulation under our state laws and Constitution,” Attorney General Letitia James said in a <a href="https://ag.ny.gov/press-release/2026/attorney-general-james-sues-coinbase-and-gemini-running-illegal-gambling" rel="noopener noreferrer nofollow">statement</a>.
James said the lawsuit seeks to recover alleged illegal profits from operating prediction markets in the state, as well as restitution, and would bar Coinbase and Gemini from offering such products to individuals under 21 years of age.
<figure><img alt="New York State, Polymarket, Kalshi, Prediction Markets" src="https://s3.cointelegraph.com/uploads/2026-04/019db123-27ac-7941-802c-4557025683f3.png">
 <figcaption><a href="https://ag.ny.gov/press-release/2026/attorney-general-james-sues-coinbase-and-gemini-running-illegal-gambling" rel="noopener noreferrer nofollow">Source</a>: Office of New York State Attorney General
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Related: <a href="https://cointelegraph.com/news/polymarket-seeking-400-million-raise-report" rel="noopener noreferrer nofollow">Polymarket in talks to raise $400M at a $15B valuation: Report</a>
<h2 id="state-regulators-crack-down-on-prediction-markets">State regulators crack down on prediction markets</h2>
The move fits into a broader push by state regulators, including New York, to assert control over prediction markets, which occupy a fast-growing corner of crypto commerce that allows users to bet on real-world events.
Much of the recent scrutiny has centered on platforms like <a href="https://cointelegraph.com/news/prediction-markets-trading-block-nevada-court-ruling" rel="noopener noreferrer nofollow">Polymarket and Kalshi</a>, which have drawn questions over whether their products fall under financial regulation or gambling laws.
The tension has also reached the federal level. The Commodity Futures Trading Commission (CFTC) has <a href="https://cointelegraph.com/news/cftc-sues-3-states-prediction-market-regulation" rel="noopener noreferrer nofollow">taken legal action against several states</a> attempting to regulate prediction markets, arguing it has sole authority over the sector.
New York’s lawsuit underscores a key risk for crypto companies. Even as the federal stance has softened, state-level enforcement remains active. By targeting prediction-style markets, regulators may be opening a new front — one that could force platforms to rethink how these products are offered in major jurisdictions.
Nevertheless, not every company is taking it lightly. As <a href="https://cointelegraph.com/news/polymarket-sues-massachusetts-claims-states-can-t-regulate-prediction-markets" rel="noopener noreferrer nofollow">Cointelegraph reported</a>, Polymarket has filed a lawsuit against Massachusetts, arguing the state lacks authority to regulate prediction markets approved by the CFTC.
<figure><img alt="New York State, Polymarket, Kalshi, Prediction Markets" src="https://s3.cointelegraph.com/uploads/2026-02/019c443c-687d-71a2-b55d-54e686751aa5.png">
 <figcaption>Source: <a href="https://x.com/HereComesKumar/status/2020845615249518916" rel="noopener noreferrer nofollow">Neal Kumar</a>, chief legal office, Polymarket
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Related: <a href="https://cointelegraph.com/news/ice-600m-polymarket-investment-prediction-markets-scrutiny" rel="noopener noreferrer nofollow">NYSE parent ICE completes new $600M investment in Polymarket</a>

New York targets Coinbase, Gemini in fresh crackdown on prediction markets

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