US District Judge Andrew P. Gordon has surprised industry observers and likely shocked prediction market Crypto.com’s executives after he ordered the Singapore-based crypto giant to halt its sports event contracts in Nevada starting Monday.
denying the firm’s request for legal cover
Judge Gordon rejected Crypto.com’s motion for a preliminary injunction, denying the firm’s request for legal cover while it challenges the Nevada Gaming Control Board’s initial May 20 cease-and-desist letter that led to its state troubles.
After the NGCB’s letter, Crypto.com filed a suit challenging the regulator’s authority in the US District Court for Nevada on June 3. This suit contained a Preliminary Injunction Motion urgently requesting the judge to temporarily stop the NGCB from enforcing its ban on its sports events contracts, or Contracts for Difference (CFDs), while its larger lawsuit, arguing it is beholden to federal, not state, laws, continued.
Now, Judge Gordon has sprung an unexpected surprise, considering he let Kalshi.com off the hook in August by granting the prediction market leader the preliminary injunction it requested, allowing it to carry on offering CFDs in Nevada.
Gordon ruled that Crypto.com’s CFDs do not qualify as swaps under federal jurisdiction, making them subject to state gambling laws, and reason for him to bring the market to a halt.
According to reports, Crypto.com has filed a notice that it will appeal to the Ninth Circuit Court of Appeals. Before Monday, however, it must implement geofencing blocks to stop Nevada sports bettors from using its markets or face major penalties.
On the plus side for the firm, it inked a deal last week with Truth Social to bring its CFDs to a social media platform for the first time.
