The recent attacks on sports prediction markets are causing trouble in the crypto space, as well
Crypto.com’s North American derivatives arm has filed a federal lawsuit against the Nevada Gaming Control Board (NGCB), challenging the state’s attempt to block its sports prediction market. The legal dispute centers on whether the exchange’s event-based financial contracts fall under state gambling regulations or are protected under federal commodities law.
The lawsuit, filed June 3 in a Nevada federal court, claims the NGCB overstepped its authority by trying to classify federally approved derivatives contracts as illegal sports betting. North American Derivatives Exchange, Inc. (NADEX), operating under the Crypto.com brand, argues that its event contracts—such as those based on sports outcomes—are regulated exclusively by the Commodity Futures Trading Commission (CFTC) under the Commodity Exchange Act.
According to the complaint, Crypto.com received a cease-and-desist letter from the NGCB on May 20. The letter demanded that the exchange stop offering its sports-related contracts to users in Nevada, threatening both civil and criminal penalties for noncompliance. In response, Crypto.com argues that the NGCB’s stance contradicts established federal authority and could cause significant harm to its operations.
The lawsuit emphasizes that the CFTC has sole jurisdiction over derivatives markets, and any attempt by state agencies to regulate or ban these federally authorized contracts violates federal law. Crypto.com says complying with Nevada’s order—such as geofencing users—would break federal rules requiring open and impartial access to the market, regardless of geographic location.
The company is asking the court to issue a permanent injunction blocking Nevada from enforcing its gaming regulations on its federally regulated platform. It also seeks a formal ruling confirming federal law preempts state interference in this matter.
This case follows a similar legal challenge by Kalshi, another event contract platform, which also took action against regulators in Nevada and New Jersey earlier this year after receiving comparable cease-and-desist notices.
