In a surprising turn of events, New York Attorney General (NYAG) Letitia James sued Coinbase and Gemini on the 21st of April. The Attorney General accused the two exchanges of illegal gambling operations via their “prediction market” platforms.
As per the press release,
An investigation by the Office of the Attorney General (OAG) found that Coinbase and Gemini are running prediction markets that constitute illegal, unlicensed gambling operations.
Grounds for suing Coinbase and Gemini’s prediction platform
The Attorney General urged Coinbase and Gemini to settle the penalty, waive illegal gains, and reimburse the alleged customers. Remarking on the matter, James further added,
Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution.
Besides the alleged illegal operations, James flagged flaws in the 18-21 age requirement, which exposed underage users to access such platforms.
The NYAG added,
Exposing young people to online gambling can have damaging effects on their mental and financial wellbeing.
Additionally, the NYAG claimed that Coinbase and Gemini lacked licenses from the New York State Gaming Commission, suggesting this was done to avoid tax obligations, raising concerns about their operations in the state.
Coinbase fights back
However, Coinbase CLO Paul Grewal dismissed these allegations with claims to fight back and noted,
Looking back, Coinbase and Gemini launched their betting platforms in response to the rise in popularity of prediction markets during the 2024 U.S. presidential election. In mid-December 2025, both launched their respective prediction markets, which now operate in all 50 U.S. states.
Now, as they face gambling allegations, competitor Polymarket has moved ahead by announcing plans for a native stablecoin.
Final Summary
- The New York Attorney General’s gambling allegations have put Coinbase and Gemini into the spotlight.
- Polymarket and Kalshi were also banned and ceased, back in 2022 and 2025, respectively, but things are normal now.
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Author: Ishika Kumari
