New York’s top law enforcement official is taking aim at two major cryptocurrency companies, accusing them of operating illegal gambling platforms that expose residents to financial and personal risk.
Attorney General Letitia James announced lawsuits Tuesday against Coinbase Financial Markets and Gemini, alleging their “prediction market” platforms violate state gambling laws by allowing users to bet on the outcome of events ranging from sports to elections.
According to the lawsuits, the platforms function as unlicensed gambling operations because users wager money on uncertain outcomes outside their control — meeting the legal definition of gambling under New York law. Officials say both companies failed to obtain required licenses from the state Gaming Commission.
The attorney general’s office also alleges the platforms were available to users as young as 18, despite state law requiring individuals to be at least 21 to participate in mobile sports betting. Investigators say that gap raises concerns about underage exposure to gambling and its associated risks.
State officials argue the companies’ operations bypass tax obligations that fund public programs, including education and gambling addiction services, while also lacking safeguards required of licensed operators.
The lawsuits seek to force both companies to stop the activity, return profits earned through the platforms, and pay restitution to affected users. The attorney general is also pursuing penalties that could amount to triple the profits tied to the alleged violations.
James said the action is part of a broader effort to enforce state laws in emerging digital markets and prevent what she described as unregulated gambling under a different name.
The lawsuits follow other recent enforcement actions targeting illegal gambling and related practices, including cases involving online sweepstakes platforms and gaming companies.
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