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NYAG Sues Coinbase for Prediction Market 'Illegal Gambling' Claim

Guavy AI Editorial Team
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Coinbase's stock price plummeted by over 7% on Tuesday after the New York State Attorney General's Office filed a lawsuit against the cryptocurrency exchange. The NYAG alleges that Coinbase's prediction market constitutes 'unauthorized illegal gambling services' rather than compliant financial derivatives.

The lawsuit claims that transactions based on outcomes of events such as sports and elections on platforms like Coinbase belong to gambling activities, violating New York state law. The age threshold for Coinbase's prediction market is 18, while New York law stipulates a minimum age of 21 for sports betting.

Prosecutors are seeking disgorgement of profits and penalties, claiming at least $2.2 billion from Coinbase. In response, Coinbase has not yet officially responded but claims that prediction markets are regulated by the CFTC, implying they are legal at the federal level.

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