Crypto.com has filed a federal lawsuit against the Nevada Gaming Control Board (NGCB), which claims the state prevented the operator from offering event contracts to Nevada-based customers.
North American Derivatives Exchange Inc, Crypto.com’s US-based online derivatives exchange, filed the lawsuit on Tuesday, 3 June, and has called for the lifting of the NGCB’s “restrain efforts”.
The grounds for the case are based on the argument that jurisdiction over event contracts is the domain of the Commodity Futures Trading Commission (CFTC) and not the state of Nevada.
In the lawsuit, Crypto.com cited the example of Kalshi’s win over Nevada in May, where Chief Judge Andrew Gordon agreed the prediction market platform’s offering fell under federal law.
The crypto exchange also noted Kalshi’s win over New Jersey the month prior as further proof of event contracts being regulated at federal level.
An excerpt from the lawsuit read: “Nevada has purported to assert jurisdiction over CDNA [Crypto.com Derivatives North America], a federally regulated designated contract market (DCM), on the mistaken premise that contracts traded on the DCM constitute ‘wagering on sporting events’ subject to Nevada gaming laws.
“But the NGCB has no authority to regulate, let alone prohibit, derivatives trading offered by a federally regulated DCM operating pursuant to federal law.”
The legal document goes on to state that Crypto.com was sent a cease-and-desist letter from the NGCB on 20 May that mentioned criminal and civil penalties as punishment should the operator continue to offer sports event contracts to Nevada residents.
In April, the CDNA filed a similar lawsuit against the Maryland Lottery and Gaming Control Commission “seeking declaratory and injunctive relief from the state’s unlawful efforts to assume regulatory jurisdiction over federally regulated derivatives trading activities”.
It followed Maryland’s cease-and-desist letter to Crypto.com as well as Kalshi and fellow event contracts platform Robinhood.
Addressing the Maryland lawsuit, Crypto.com’s chief legal officer Nick Lundgren said at the time: “The law is very clear for derivatives and prediction market event contracts, and we are proud to offer these services through a fully compliant and regulated platform.
“Our decision to sue the Maryland Lottery and Gaming Control Commission is necessary at this time, and we are fully confident that the existing laws will be recognised and upheld in our favour.”
Crypto.com launched its sports event trading contracts last December across the United States.
Announced by CEO Tarek Mansour on 4 June, Kalshi won a legal battle against Nevada that will prevent the Nevada Gaming Commission, NGCB and Nevada Attorney General from “pursuing civil or criminal enforcement against Kalshi for offering event contracts in Nevada”.
Nevada’s battle against sport event contracts comes after the CFTC dropped its election events contracts case against Kalshi.
While last month, Arizona became the most recent state to issue cease-and-desist letters to Crypto.com, Kalshi and Robinhood.
The post Crypto.com files lawsuit against Nevada Gaming Control Board over blocking of event contracts first appeared on EGR Intel.
Crypto exchange argues Commodity Futures Trading Commission holds jurisdiction over the sector and not Nevada’s gaming regulator
The post Crypto.com files lawsuit against Nevada Gaming Control Board over blocking of event contracts first appeared on EGR Intel.