Crypto.com’s OG sues Washington state after Kalshi injunction
OG is the second CFTC-registered prediction market operator to sue Washington over the threat of enforcement over alleged illegal betting.
US.- North American Derivatives Exchange, the Crypto.com subsidiary that operates the OG prediction market platform, has filed a federal lawsuit against Washington’s attorney general and members of the state’s Gambling Commission. It asserts that Washington lacks authority to regulate OG’s event contracts.
The complaint, filed on July 22 in the US District Court for the Western District of Washington, seeks declaratory and injunctive relief. It contends that state gambling laws are superseded by federal law and that the Commodity Exchange Act gives the CFTC exclusive jurisdiction over derivatives trading. It claims that this preemption is disregarded by Washington’s designation of event contracts as illegal gambling activities.
The action is in response to a preliminary injunction issued earlier this week by a King County Superior Court judge against Kalshi, stopping it from offering sports bets in the state. The filing suggests this creates an imminent threat of enforcement that would cause the company irreparable harm. It also references the CFTC’s 14 July emergency order requiring Kalshi to honour trades for Michigan customers after a state court had ordered it to unwind positions.
The complaint states: “OG cannot comply with both its federal law obligations and any purported obligations under Washington law”.
OG is the second CFTC-registered prediction market operator to sue Washington over the threat of enforcement, following an earlier action by Robinhood.
