New York Attorney General Letitia James (D) sued Coinbase and Gemini on Tuesday, accusing the two crypto companies of violating state gambling laws with their prediction markets.
James argues that the platforms fall within the state’s definition of gambling and, as a result, are running afoul of state tax obligations and gambling restrictions on New Yorkers under 21 years old.
“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,” James said in a statement.
“Gemini and Coinbase’s so-called prediction markets are just illegal gambling operations, exposing young people to addictive platforms that lack the necessary guardrails,” she continued. “My office is taking action to protect New Yorkers and stop these platforms from violating the law.”
The Hill has reached out to both Coinbase and Gemini for comment.
The lawsuit against the two crypto firms, which both announced a push into prediction markets late last year, marks the latest in a series of legal battles with states over the platforms.
Numerous states have accused prediction markets of circumventing state gambling laws, with mixed results in court.
The industry secured a key ally earlier this year in the recently confirmed chair of the Commodity Futures Trading Commission (CFTC), Michael Selig. He has argued that his agency has exclusive jurisdiction over the platforms and vowed to fight state regulations.
Earlier this month, the CFTC sued Arizona, Connecticut and Illinois over their efforts to place restrictions on prediction markets within their borders.