<\/p>\n
Coinbase\u2019s chief legal officer, Paul Grewal, said Wednesday that the company had removed New York Attorney General Letitia James\u2019 prediction markets lawsuit from state court to federal court, arguing that the case turns on disputed questions of federal law over how event contracts are regulated.<\/p>\n
The move escalates a legal fight that could help define whether prediction markets fall under federal commodities regulation and the scope of the US Commodities and Futures Trading Commission\u2019s (CFTC) or state gambling laws, with broader implications for the oversight of platforms like Coinbase and Gemini.<\/p>\n
\u201cWe have removed this action to federal court,\u201d wrote<\/a> Grewal in a Wednesday X post, adding that New York\u2019s claims raise \u201cdisputed and substantial questions of federal law\u201d and are subject to \u201ccomplete preemption.\u201d<\/p>\n It comes in response to a Tuesday lawsuit filed by New York\u2019s Attorney General<\/a> Letitia James against Coinbase Financial Markets and Gemini Titan, alleging their prediction market offerings violate New York gambling law by allowing users to bet on sports, entertainment and elections without a state gaming license, including users between 18 and 20 years old.<\/p>\n Related: <\/strong><\/em>Kalshi, Polymarket face trading halt in Nevada after court rulings<\/strong><\/em><\/a><\/p>\n The lawsuit seeks fines, forfeiture of alleged illegal profits and restitution for customers, while also asking the court to stop the companies from offering similar products in New York without complying with state law.<\/p>\n Cointelegraph has approached Coinbase for comment on the matter and a copy of the court filing.<\/p>\n State regulators have stepped up pressure on prediction market platforms in recent months, with 11 states having pursued legal action<\/a> against them, seeking to assert control over federal regulators.<\/p>\n Coinbase\u2019s Grewal said<\/a> in a Tuesday X post that prediction markets are \u201cfederally regulated national exchanges\u201d under the CFTC and the company will continue to \u201cfight for the federal oversight of these markets that Congress intended.\u201d<\/p>\n Coinbase launched prediction<\/a> markets across 50 US states, including New York, on Jan. 28, offering trades on \u201cany real-world outcomes\u201d across sports, politics, culture and more.<\/p>\n The New York Attorney General\u2019s lawsuit is the latest sign that state regulators are seeking to assert their jurisdiction over emerging prediction markets, contradicting the CFTC\u2019s stance, which said it has exclusive jurisdiction over prediction markets<\/a> registered as designated contract markets, such as Polymarket and Kalshi.\u00a0<\/p>\n On April 2, the CFTC filed three separate lawsuits<\/a> against the gaming regulators of Illinois, Connecticut and Arizona, arguing that those states could not apply their gambling laws and licensing requirements to event contracts listed on CFTC-regulated platforms.<\/p>\n On April 8, the CFTC and US Department<\/a> of Justice (DoJ) asked a federal court to block Arizona from enforcing state gambling law against Kalshi\u2019s event contracts, arguing that they fall under the CFTC\u2019s exclusive authority.<\/p>\n Magazine: <\/strong><\/em>Will the CLARITY Act be good \u2014 or bad \u2014 for DeFi?<\/strong><\/em><\/a><\/p>\n <\/div>\n Coinbase\u2019s chief legal officer, Paul Grewal, said Wednesday that the company had removed New York Attorney General Letitia James\u2019 prediction markets lawsuit from state court to federal court, arguing that the case turns on disputed questions of federal law over how event contracts are regulated. The move escalates a legal fight that could help define […]<\/p>\n","protected":false},"author":2,"featured_media":425219,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[235,203,210,234,231,232,237,238,236,233],"class_list":["post-425218","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain","tag-bitcoin","tag-crypto-currency","tag-elon-musk","tag-ethereum","tag-hyperledger","tag-ibm","tag-mining","tag-nodes","tag-spacex","tag-tesla"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/425218","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=425218"}],"version-history":[{"count":1,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/425218\/revisions"}],"predecessor-version":[{"id":425220,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/425218\/revisions\/425220"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/425219"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=425218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=425218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=425218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}State regulators battle for prediction markets jurisdiction<\/h2>\n