Is Coinbase legal in New York?

On April 21, 2026, the attorney general filed a verified petition (original) in New York County Supreme Court, Index No. 451604/2026, under Executive Law § 63(12) (¶1). The respondent is Coinbase Financial Markets, Inc., which the petition describes as a Delaware corporation headquartered in New York City (¶15). It is the CFTC-registered futures commission merchant through which Coinbase customers trade event contracts listed on Kalshi's exchange. The petition never names Kalshi; a search of its full text finds no mention.

The petition builds its case from Coinbase's own launch. It says Coinbase announced its prediction markets on December 17, 2025 (¶4) and posted on January 28, 2026 that they were "live in all 50 states" (¶30). Its examples include a Knicks point spread, the February 8 Super Bowl and a St. John's game against Providence (¶7). It describes a "$1,000,000 Bitcoin prize pool" for five correct Super Bowl picks (¶32), referral rewards for new users who trade $30 within seven days (¶33), and a March 19 post inviting trades on Siena against Duke while Siena led by 10 (¶34). New York bars wagering on any event a New York college team plays in, even for licensed sportsbooks (¶28). The petition also says Coinbase opens accounts to people from 18, where New York's sports wagering age is 21 (¶¶27, 51), and that Coinbase "has never been licensed with the New York State Gaming Commission in any capacity" (¶10). Beyond state law it alleges a violation of the federal Wire Act (¶12).

The attorney general's release announced a parallel petition against Gemini Titan the same day.

Paragraph 13 lists the relief. It asks the court to permanently bar Coinbase "from continuing to operate a gambling business in New York without being licensed by the New York State Gaming Commission", and to order an accounting of every bet placed and the money customers lost and paid in. It seeks restitution, disgorgement, damages and penalties, including three times Coinbase's gain under Penal Law § 80.10 and $100,000 for each offer of unauthorized sports wagering under Racing Law § 1367(16)(a). The attorney general also asked for a temporary restraining order and a preliminary injunction (remand memo, p.1).

None of this has been granted. Every item above is a request in a pending case.

Coinbase removed the petition to the Southern District of New York on the day it was filed, where it became No. 1:26-cv-03300 (docket). On May 1 the attorney general moved to send it back. Her memo argues that all eight causes of action arise under state law, that federal preemption under the Commodity Exchange Act is a defense and so cannot support removal, that the Wire Act's safe harbor does not cover accepting interstate bets, and that complete preemption and the federal officer removal statute do not apply (pp.2-3). She also asks for her fees.

The case was first before Judge Victor Marrero and is now before Judge Lorna Schofield. On August 10 she moved the initial pretrial conference from August 18 to August 31, in one order captioned in four cases: this one, New York's Gemini Titan petition, the federal government's suit against New York and North American Derivatives Exchange's suit against the attorney general (No. 26-cv-3318, ECF 28). We found no ruling on remand, and no ruling on the merits.

Nothing we found in the New York filings restricts withdrawals, deposits or open positions. The petition's accounting request would cover bets placed and money lost by customers, and its restitution request would return money to them, but a court would have to grant either first. As of the last check, none has.

On August 12, 2026 the New York City Council opened an inquiry into how Kalshi, Polymarket, Coinbase and Gemini Titan market prediction markets. An inquiry orders nothing, and it is not a lawsuit. We found no New York Gaming Commission letter or order aimed at Coinbase.

Kalshi, whose exchange lists the contracts Coinbase customers trade, faces its own suit from the attorney general: is Kalshi legal in New York?. Polymarket's New York case is covered in is Polymarket legal in New York?.

New York's petition treats each contract as a wager Coinbase may not accept without a state license. Coinbase, in its federal suits against other states, calls them swaps that the CFTC alone regulates. The remand fight, and any later ruling on the merits, settles which regime licenses the business. It says nothing about how a trader's gains and losses are reported, and the IRS has not addressed event contracts.

Among the people we've seen file event contracts, three routes come up: reporting the year as gambling winnings and losses, reporting each closed trade as a capital gain or loss on Form 8949, and applying Section 1256's 60/40 split on Form 6781. The Tax Center guides walk through each, and every other state's Coinbase status is on the Coinbase legal page.